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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience:  MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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14. Can I deduct the interest paid on the second home--which

Customer Question

14. Can I deduct the interest paid on the second home--which is in the next town over--in addition to claiming interest on the first home?

If yes, where to enter that interest?

If not, why not?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Yes, same line as your primary residence - just add the two interest figures up.

You can only do this for your primary and second residence. Any more than that is not deductible.

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Customer: replied 1 year ago.

So the primary address would be mentioned, and the interest of the secondary residence would just be added to the interest amount entered for the primary residence?

 

Could you please refer to IRS form/document and where do I enter that information in Turbo Tax 2011, if you are familiar with the software.

Expert:  Megan C replied 1 year ago.
It's on form 1040 Schedule A, and if you do not itemize you will not get a deduction.

Also, turbo tax will ask you questions and it should ask you for the amount of your home mortgage interest. Just add the two figures from the 1098 forms you received from the bank.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO XXXXX ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**
Customer: replied 1 year ago.

OK. So the two addresses need to be mentioned on Schedule A?

 

Where does the combined interest go then?

Expert:  Megan C replied 1 year ago.
You won't put the address anywhere on the tax form. You only put the amount of the interest on Schedule A.

If Turbo Tax asks for the address, it's just for informational purposes. It won't actually get printed on your return

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO XXXXX ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid, but the Web site will still collect your payment. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**
Customer: replied 1 year ago.

I am a bit confused. You are saying that I need to "itemize" and then you are saying that I lump the two interests together.

 

So the two interests get lump together and reported on line 10 of Schedule A for 2011?

 

Expert:  Stephanie B. replied 1 year ago.
Another professional here. I see the original expert "opted out". MyVirtual CPA is correct that in order to deduct the mortgage interest on a primary and secondary home, you must be able to "itemize". This means taking the "itemized deductions" on Schedule A instead of taking the standard deduction. You are automatically allowed the standard deduction but if your "itemized" deductions are more than the standard deduction, you are allowed to use "itemized" deductions. Itemizing is done by reporting specific allowed deductions on Schedule A. This is where mortgage interest, real estate taxes, medical expenses, charitable contributions, and such are reported.

She is also correct that you will add the mortgage interest of the two homes together and report this total amount on line 10 of the Schedule A. Here is a link to Schedule A so you can see it if you are not familiar with the form. http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

Please let me know if you need further clarification.

I look forward to your response.

Stephanie
Customer: replied 1 year ago.
Thanks. If you are familiar with Turbo Tax how do I enter the two interests together because it asks me information one by one. If you don't know Turbo Tax then fine.
Expert:  Stephanie B. replied 1 year ago.

Ok. I am looking at TurboTax Deluxe online and I am at the Deductions and Credits screen. I click on the Explore on my Own. It takes me to Your Home. I click on Mortgage Interest start or update so I can edit it. It brings up a screen that shows the list of the lender that I have already entered and the interest I have already entered. Then it says Add a Lender at the bottom of the list. I can click on that and add another Lender and add that Lender's interest. It then takes me to the list again that now shows I have two lenders and totals the mortgage interest I have paid to both lenders.

I hope this helps you.

Stephanie

Customer: replied 1 year ago.
So two different lenders are mentioned without specifying which lender goes with which house?
Expert:  Stephanie B. replied 1 year ago.
Yes. That is true. You don't have to specify which home the interest is paid for.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience: MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
Stephanie B. and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thanks for the succinct answers.
Expert:  Stephanie B. replied 1 year ago.
You are very welcome!

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