A taxing situation
April 11, 2012 10:19 AM Subscribe
Looking for some tax help ! We refinanced a mortgage last April, going from a traditional bank to a savings & loan. During the process, we also closed the bank line of credit and opened a new one at the S&L. The bank held an escrow, but the S&L does not. My 1099 from the S&L has a modest earned interest amount for the period of April - December, but the bank's 1099 is more than 10x that amount. Is this due to the escrow, or is this a mistake ?
Best answer: I think there's something missing in your question. First, if the S&L had no escrow account, then I don't know what you would have earned interest on. Second, you say "more than 10x that amount," but any interest payments on escrow should be very small. Generally escrow payments are only a few hundred dollars a month, and the minimum required interest rate to be paid according to Maine law was 0.15 percent. So even if you had, say, $2000 in average escrow, 4 months of interest would be less than a dollar.
Did you have other accounts at the bank and S&L? Are you perhaps confusing a 1099 (interest the institution paid to you) with a 1098 (mortgage interest you paid to the institution)?
posted by Mr.Know-it-some at 10:39 AM on April 11, 2012
Did you have other accounts at the bank and S&L? Are you perhaps confusing a 1099 (interest the institution paid to you) with a 1098 (mortgage interest you paid to the institution)?
posted by Mr.Know-it-some at 10:39 AM on April 11, 2012
Response by poster: Thanks, guys. It was a mistake by the bank, and I was finally able to reach someone there who had the juice to fix it !
posted by lobstah at 10:45 AM on April 11, 2012
posted by lobstah at 10:45 AM on April 11, 2012
Response by poster: Just to follow up, we deposited some cash in the S&L as well, so that was the interest earned. We also still have some cash at the bank, but not THAT much...wish I did !
posted by lobstah at 10:49 AM on April 11, 2012
posted by lobstah at 10:49 AM on April 11, 2012
Great to hear! Have fun doing your taxes! (We're doing ours tonight. Ugh.)
posted by gauche at 10:57 AM on April 11, 2012
posted by gauche at 10:57 AM on April 11, 2012
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Good luck!
posted by gauche at 10:25 AM on April 11, 2012