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tsalogan
Employee
March 28, 2020
Question

I filed my 2019 taxes, claimed a Deduction & Credit for bought Points & Origination fees. Later, issued a VA Funding Fee Refund. In what way do I amend filing?

  • March 28, 2020
  • 1 reply
  • 0 views
Having already filed 2019 taxes and claimed a refinanced mortage loan's Deduction & Credit for Bought Points & Origination Fees, do I now amend my filing by simply claiming my post-filing received VA Funding Fee Refund declaring it as "Other Income" under the "Wages & Income" section?...Or, how do I accurately report such on an amended filing?

1 reply

KathrynG3
March 30, 2020

It depends. If the VA Funding Fee Refund was received in 2020, then there is no adjustment needed in 2019. In the event that you itemized your return in 2019, then the Funding Fee Refund would be adjusted in the year received.

 

From IRS Publication 936 Home Mortgage Interest Deduction:

Refunds of interest.

If you receive a refund of interest in the same tax year you paid it, you must reduce your interest expense by the amount refunded to you. If you receive a refund of interest you deducted in an earlier year, you must generally include the refund in income in the year you receive it. However, you need to include it only up to the amount of the deduction that reduced your tax in the earlier year. This is true whether the interest overcharge was refunded to you or was used to reduce the outstanding principal on your mortgage. If you need to include the refund in income, report it on Schedule 1 (Form 1040 or 1040-SR), line 8.

If you received a refund of interest you overpaid in an earlier year, you will generally receive a Form 1098, Mortgage Interest Statement, showing the refund in box 4.

 

VA Funding Fee and Closing Costs

IRS Interactive Tax Assistant: Can I deduct my mortgage related expenses?

 

@tsalogan