Mortgage Interest - Prepay Penalty

There are situations in which certain items can be included as home mortgage interest and others cannot.

Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 169:

Mortgage prepayment penalty. . If you pay off your home mortgage early, you may have to pay a penalty. You can deduct that penalty as home mortgage interest, provided the penalty isn't for a specific service performed or cost incurred in connection with your mortgage loan.

To enter home mortgage interest in the TaxAct® program:

  1. From within your TaxAct return (Online or Desktop) click Federal. On smaller devices, click in the upper left-hand corner, then select Federal.
  2. Click Itemized or Standard Deductions to expand the category, then click Interest expenses
  3. The program will proceed with the interview questions to enter the appropriate information