On January 2, 2013 President Obama signed the American Taxpayer Relief Act of 2012, better known as the "fiscal cliff bill". Among the provisions was the retroactive reinstatement of Mortgage Insurance Premiums deductions for tax years 2012 and 2013. Today the IRS released updated form 1098 instructions to accommodate the new reporting. The new instructions affect both the 1098 borrower statement and the 1098 electronic filing.
Update: Process for completing form 1098 / borrower statement printing:
For 2012, in order to report mortgage insurance premiums to both the borrower and the IRS, enter the letters MIP followed by the amount being reported into the first line of the "free form" box 4. Do not enter any commas.
Example: To report $425.15 of mortgage insurance premiums paid by the borrower in 2012 enter "MIP 425.15" into the first line of box 4 of their 2012 1098.
For large volume filers, this change should be made on the 1098 import file before importing into the 1099 Pro software. In the example, "MIP 425.15" should be mapped to "Box 4 Line 1" allowing the filers use of Box 4 Lines 2 & 3. If the filer does not intend to use Box 4 Lines 2 & 3 then "MIP 425.15" can be mapped directly to "Box 4 All Lines".
Update: e-filing form 1098 / electronic filing process:
(Enterprise & Corporate Suite customers Only.)
The IRS Publication 1220 (electronic filing specifications) has been updated to add the new box 4 amount code specifically for mortgage insurance premiums. The 1099 Pro Enterprise(2012.13.15+) and Corporate Suite(2012.13.12+) software has been updated to scan the free form box 4 for the words MIP followed by the amount. That amount will be reported in the new box 4 position of the electronic file.
Note: The 1099 Pro Service Bureau and www.eFileMyForms.com have the electronic filing update already in place.
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