Michigan taxpayers already understand the complexity of filing taxes. Unfortunately, any mistake made in the filing of taxes can result in penalties or a possible tax audit. That is the sort of attention we all would prefer to avoid.
There are always a number of forms required when filing taxes to claim particular deductions. One such form concerns interest payments regarding mortgage interest deductions. This is Form 1098. Mortgage lenders send Form 1098 to both homeowners and the IRS. However, due to recent changes, this document will contain more information than during past years. And because of such a change, some authorities speculate the IRS may also be paying more attention to mortgage deductions.
Because mortgage deductions are a good way to reduce taxes, these are extremely popular. In fact, mortgage interest deductions are one of the biggest write-offs in the tax code.
Projected write-offs for mortgage interest deductions are at $357 billion from 2016 to 2020. Such a large sum may be the reason why the IRS is scrutinizing mortgage deductions to such a degree. And it may also be why mortgage interest deductions appears to be a huge target for the IRS.
While there are constantly calls for tax simplification, it is doubtful the IRS will make anything easier due to the amount of revenue the agency seeks. Obviously, most individuals do not keep close track of every change in tax law such as those pertaining to mortgage deductions. It is therefore important to sometimes seek the guidance of individuals such as experienced tax attorneys who do keep track of such changes.