Wednesday, September 2, 2009

IRS cops taking a closer look at home mortgages

IRS will be watching those deductions we take for interest on our home mortgage payments more closely, the Treasury Department's Inspector General said recently.

The service's aim is to catch tax cheats who either don't file or who report low incomes but are making McMansion-sized mortgage payments with money they may be hiding. There already is a Form 1098 that will help track these discrepancies, but IRS hasn't been using it much, Treasury investigators found.

This could get complicated for all the estimated 51 million home owners making mortgage payments though. That's because no one appears to know how to accurately calculate how much we should be deducting, the Government Accountability Office reports. An estimated 12 percent to 14 percent of the taxpaying public writes off either too much or too little, GAO found. But IRS, the tax industry and individual taxpayers often don't have enough information to catch those errors when they happen.

Tax audits are rising again, Syracuse University reports, so keep good tax records and file accurately. And if you are among the small contractors, free lancers and other non W-2 workers whose returns may be watched most closely, remember your Sept. 15 estimated quarterly tax payments need to hit the Post Office in just less than two weeks.

No comments: