Microsoft KB Archive/197518

Mortgage Interest Tax Deduction Is Not Accurately Estimated

PSS ID Number: Q197518 Article last modified on 01-13-1999

WINDOWS:6.0,7.0

WINDOWS

================================================================ ==

The information in this article applies to:

 Microsoft Money 98 == Microsoft Money 99 == 

= SYMPTOMS =

When you use the Tax Worksheet in Microsoft Money, the default mortgage interest calculated by Money may not accurately estimate the total amount of mortgage interest you paid during the entire year. As a result, Money may not accurately estimate your mortgage interest tax deduction.

= CAUSE =

If you schedule your mortgage payments as recurring bills in Money, then the estimate of mortgage interest for the year does not take into account any mortgage payments that are scheduled but have not yet been paid.

Money’s estimate includes only the sum of interest for mortgage payments you have already made.

If you do not schedule your mortgage payments as recurring bills, then Money annualizes any payments you have already made during the year using a formula that may significantly overestimate or underestimate the amount of interest you paid during the entire year.

= RESOLUTION =

To work around this issue, use a Loan Amortization report to calculate the mortgage interest you paid during the entire year and then enter this amount on the Deductions page of the Tax Worksheet. To do this, follow the appropriate steps for your version of Money.

Money 99

 * 1) On the Money navigation bar, click Reports.
 * 2) In the left pane, click What I Owe.
 * 3) Click Loan Amortization.
 * 4) In the Accounts box, click the appropriate account.
 * 5) Click Go To Report/Chart.
 * 6) Click Customize.
 * 7) Under Include Transactions From, click to select the Account Register and Amortization Schedule check boxes.
 * 8) Click the Date tab.
 * 9) In the Range box, click Current Year, and then click OK.

Note the Grand Total displayed for the Interest column.

Money 98

 * 1) On the Money navigation bar, click Reports.
 * 2) In the left pane, click What I Owe.
 * 3) Click Loan Amortization.
 * 4) Click Go To Report/Chart.
 * 5) Click Customize.
 * 6) Under Include Transactions, click the appropriate account in the From Loan box, and then click All Transactions.
 * 7) Under Date Range, click Current Year in the Dates box.
 * 8) Click View.

Note the Grand Total displayed for the Interest column.

Now use the appropriate steps for your version of Money to manually enter this amount on the Deductions page of the Tax Worksheet.

Money 99

 * 1) On the Navigation bar, click Decisions.
 * 2) In the left pane, click Tools.
 * 3) Click Tax Worksheet.
 * 4) Click the Deductions tab.
 * 5) In the Mortgage Interest box, enter your calculation of the amount of mortgage interest you paid during the entire year.
 * 6) Click to clear the Use Money’s Default check box.

Money 98

 * 1) On the Navigation bar, click Money Insider.
 * 2) Click Tax Worksheet.
 * 3) Click the Deductions tab.
 * 4) In the Mortgage Interest box, enter your calculation of the amount of mortgage interest you paid during the entire year.

Money now uses this amount to accurately estimate your mortgage interest tax deduction.

= STATUS =

Microsoft has confirmed this to be a problem in the Microsoft products listed at the beginning of this article.

= Additional query words: w_money 6.0 7.0 hat tax estimator =

Keywords : mnyguide kbimu Version : WINDOWS:6.0,7.0 Platform : WINDOWS Issue type : kbbug Solution Type : kbpending ============================================================================= Copyright Microsoft Corporation 1999.