Has anyone dealt with handling PMI deduction in this situation? My boyfriend and I bought last year too and we have mortgage insurance since we put less than 20% down.

This is such a helpful thread! I'm in a similar situation - my partner and I bought a house last year but aren't married yet. One thing I wanted to add is about property tax payments. Even if your mortgage company handles the property tax payments through escrow, you can still deduct those taxes on your return. Make sure to check your annual escrow statement from your lender - it should show exactly how much was paid in property taxes for the year. This amount can be deducted separately from the mortgage interest, and the same rules apply about splitting it between you and your fiancé if you're both contributing to the mortgage payments. Also, don't forget about any points you paid when you got the mortgage - those are typically deductible in the year you bought the house if it was your primary residence. The points would be shown on your HUD-1 settlement statement or Closing Disclosure from when you purchased. Good luck with your taxes and congratulations on the house! The first year of homeownership taxes can be confusing but you'll get the hang of it.

Military spouse here! Step 1: Calculate your taxes both ways before deciding. We did MFS last year because my husband was deployed to a combat zone (tax-free income) while I had regular taxable income. Step 2: Document who paid what - we keep separate accounts for this reason. Step 3: If using MFS, each claim your portion of mortgage interest on Schedule A. Step 4: File before the April 15th deadline - it's coming up fast! The mortgage interest split was actually straightforward on our tax software. Just had to enter the 1098 information and then specify what percentage each person paid.

Great question! As a military family myself, I can confirm you absolutely can file separately with a joint mortgage. The key is documenting who actually paid the mortgage interest. Since you're both on the loan, you'll split the 1098 interest based on actual payments made. If paying from a joint account, it's typically 50/50 unless you can prove otherwise with bank records. For military families, MFS can make sense in several scenarios: different state residency situations during PCS moves, combat pay exclusions, income-based student loan repayments, or when one spouse has significant miscellaneous deductions. However, remember both spouses must choose the same deduction method (both standard or both itemize). I'd strongly recommend calculating both MFJ and MFS scenarios before deciding. Military-specific tax software like FreeTaxUSA Military or TurboTax Military can help you compare both filing statuses easily. Also consider consulting with a tax professional who understands military tax situations - many bases offer free tax prep services that are familiar with these complexities.

You're absolutely right to be concerned, but you can still claim this deduction with proper documentation. The IRS doesn't automatically disallow legitimate business expenses just because you failed to file a 1099 - these are two separate issues. Here's what you need to do: 1. **Document everything thoroughly**: Keep the canceled check, contract, photos of completed work, any text messages or emails about the project, and write a detailed memo explaining the circumstances (including his refusal to provide W9 info). 2. **Report the expense correctly**: Include it on Schedule C line 11 (Contract labor) when you file your return. The expense is deductible regardless of 1099 filing status. 3. **Be prepared for potential penalties**: You may face a $280 penalty for each missing 1099, but this is often less than the tax savings from claiming the legitimate deduction. 4. **Consider backup withholding**: For future reference, if a contractor refuses to provide their TIN, you're supposed to withhold 24% of payments and send it to the IRS. Obviously too late for this situation, but good to know going forward. The key is that you genuinely attempted to get the required information and have solid proof this was a legitimate business expense. Keep excellent records and consider consulting a tax professional if you're audited, but don't let fear of the 1099 issue cost you a valid deduction.

I've been following this thread and wanted to add a perspective from someone who went through an IRS audit over a similar situation. About two years ago, I got audited and one of the items they questioned was a $6,200 payment to a contractor where I couldn't produce a 1099. The auditor was actually pretty reasonable about it. What saved me was having excellent documentation - I had the contract, photos of the work (before/during/after), the canceled check, and most importantly, a written record of my attempts to get the contractor's information. I even had screenshots of text messages where he refused to provide his SSN. The auditor told me that the IRS sees this situation more often than you'd think, especially in construction and home services. They're mainly looking for two things: 1) Was this a legitimate business expense? and 2) Did you make good faith efforts to comply with reporting requirements? I ended up paying the $280 penalty for the missing 1099, but I got to keep the full deduction. The tax savings from the deduction were about $1,500, so it was still a net positive. The auditor even gave me some tips for better record-keeping going forward. Bottom line: Don't let fear of the penalty stop you from claiming a legitimate business expense. Just make sure your documentation is rock solid.

The cycle code breakdown everyone's given is spot on! Just wanted to add that the "ATE (WHICHEVER IS LATER)" text you're seeing is probably a fragment from "ESTIMATED TAX PAYMENT DATE" or similar - transcripts sometimes display weird formatting. One thing to watch for: if you see a 846 code appear on your transcript, that's your actual refund date! The 846 code will show the exact date your refund gets sent out. Until then, the cycle codes and processing dates are just showing that your return is moving through the system normally. Keep checking on Fridays since your cycle ends in 05. Most people with similar cycle codes from early February have been seeing their 846 codes pop up within 2-3 weeks. Your transcript looks like it's following the normal timeline so far!

Hey @DeShawn Washington! Looking at your cycle code 20250405, you're definitely on track for normal processing. That "05" means your updates happen on Fridays, so definitely check your transcript this Friday morning (Feb 14th) for any changes. The confusing formatting you're seeing with "ATE (WHICHEVER IS LATER)" and the fragmented text is totally normal - IRS transcripts are notorious for weird display issues. What matters most is that you have those DW credit codes showing up. Here's what I'd watch for: Keep an eye out for transaction code 846 to appear on your transcript - that's your golden ticket! When you see 846, it'll have your actual refund date next to it. Based on your cycle date and the normal processing timeline, you should see some movement in the next 1-2 weeks. Don't stress too much about WMR not updating yet - transcripts usually show changes before WMR does. Your return looks like it's moving through the system normally! 🙂

Great thread everyone! I just wanted to add a few practical tips for anyone working through Form 4952: 1. Keep detailed records of what constitutes your investment income vs. other types of income throughout the year. It makes tax time much easier. 2. If you're unsure about whether to make the election for qualified dividends or capital gains, calculate both scenarios before deciding. Sometimes the math doesn't work out in your favor even when you have excess investment interest expenses. 3. Don't forget that any investment interest expense you can't deduct this year carries forward to future years, so it's not completely lost if you don't have enough investment income this year. The distinction between investment income and business income (like rental properties) can be tricky, but it's crucial for getting Form 4952 right. When in doubt, consult the instructions or speak with a tax professional - the rules can be quite nuanced depending on your specific situation.

I've been dealing with Form 4952 for several years now and wanted to share some additional insights that might help others in similar situations. One thing that often trips people up is the timing of when investment interest expenses are deductible. The investment interest expense deduction is limited to your net investment income for the current year - you can't "pre-deduct" against expected future investment income. However, as others mentioned, any excess does carry forward indefinitely. Also, if you have investment expenses other than interest (like investment advisory fees), those are treated differently post-2017 tax reform. Investment advisory fees are no longer deductible as miscellaneous itemized deductions, but investment interest expenses still are deductible (subject to the investment income limitation). For those with complex investment structures involving multiple partnerships or investment entities, I'd strongly recommend working with a tax professional who specializes in investment taxation. The interaction between passive activity rules and investment interest limitations can get quite complex, especially when you have multiple K-1s with different types of income and expenses. The key is making sure you're properly characterizing all your income and expenses before completing Form 4952. Getting that foundation right makes the rest of the form much more straightforward.