Interest is an amount you pay for the use of borrowed money. To deduct interest that you paid on a debt, you must be legally liable for the debt. For most types of interest you must itemize your deductions on Schedule A, Form 1040 to qualify for the deduction. Deductible interest includes home mortgage interest paid, points and loan origination fees, investment interest paid, and mortgage insurance premiums.
For mortgage interest paid, the taxpayer should receive Form 1098 showing the full amount of interest paid for the year, if their payments exceed $600 for the year. Anything less can still be reported by the taxpayer as a deduction, but payments may not be reported on Form 1098.
To enter Interest You Paid in TaxSlayer Pro, from the Main Menu of the Tax Return (Form 1040) select:
- Itemized Deductions Menu
- Interest You Paid
NOTE: This is a guide on entering Interest You Paid into the TaxSlayer Pro program. This is not intended as tax advice.