Page 195 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Do not include on line 14 any contri- lines 16a and 16b. Follow the instruc- Line 18 13:32 - 25-Jan-2023
butions you made on your behalf as a tions under How to report, later, but re-
self-employed person to an accident and port the reduced interest on lines 16a Include on this line your expenses for
health plan. However, you may be able and 16b. The interest you can't deduct office supplies and postage.
to deduct on Schedule 1 (Form 1040), this year will carry forward to next year
line 17, the amount you paid for health on Form 8990. Line 19
insurance on behalf of yourself, your If you are a small business taxpayer
spouse, and dependents, even if you do or meet one of the other filing excep- Enter your deduction for the contribu-
not itemize your deductions. See the in- tions for Form 8990, follow the instruc- tions you made for the benefit of your
structions for Schedule 1 (Form 1040), tions under How to report, later, and re- employees to a pension, profit-sharing,
line 17, for details. port all of your deductible interest on or annuity plan (including SEP, SIM-
PLE, and SARSEP plans described in
You must reduce your line 14 deduc- lines 16a and 16b. Pub. 560). If the plan included you as a
tion by the amount of any credit for How to report. If you have a mortgage self-employed person, enter the contri-
small employer health insurance premi- on real property used in your business, butions made as an employer on your
ums determined on Form 8941. See enter on line 16a the interest you paid behalf on Schedule 1 (Form 1040),
Form 8941 and its instructions to deter- for 2022 to banks or other financial in- line 16, not on Schedule C.
mine which expenses are eligible for the stitutions for which you received a Form
credit. 1098 (or similar statement). If you did This deduction may be subject to lim-
not receive a Form 1098, enter the inter- itations. For more information on poten-
Line 15 est on line 16b. tial limitations, see Pub. 560.
Deduct premiums paid for business in- If you paid more mortgage interest In most cases, you must file the ap-
surance on line 15. Deduct on line 14 than is shown on Form 1098, see chap- plicable form listed below if you main-
amounts paid for employee accident and ter 4 of Pub. 535 to find out if you can tain a pension, profit-sharing, or other
health insurance. Do not deduct amounts deduct the additional interest. If you can, funded-deferred compensation plan. The
credited to a reserve for self-insurance include the amount on line 16a. Attach a filing requirement is not affected by
or premiums paid for a policy that pays statement to your return explaining the whether or not the plan qualified under
for your lost earnings due to sickness or difference and enter “See attached” in the Internal Revenue Code, or whether
disability. For details, see chapter 6 of the margin next to line 16a. or not you claim a deduction for the cur-
Pub. 535. If you and at least one other person rent tax year. There is a penalty for fail-
(other than your spouse if you file a joint ure to timely file these forms.
Lines 16a and 16b return) were liable for and paid interest Form 5500-EZ. File this form if you
on the mortgage and the other person re- have a one-participant retirement plan
Interest allocation rules. The tax treat- ceived the Form 1098, include your that meets certain requirements. A
ment of interest expense differs depend- share of the interest on line 16b. Attach
ing on its type. For example, home a statement to your return showing the one-participant plan is a plan that covers
only you (or you and your spouse).
mortgage interest and investment inter- name and address of the person who re-
est are treated differently. “Interest allo- ceived the Form 1098. In the margin Form 5500-SF. File this form electron-
cation” rules require you to allocate next to line 16b, enter “See attached.” ically with the Department of Labor (at
(classify) your interest expense so it is If you paid interest in 2022 that also efast.dol.gov) if you have a small plan
deducted (or capitalized) on the correct applies to future years, deduct only the (fewer than 100 participants in most ca-
line of your return and receives the right part that applies to 2022. ses) that meets certain requirements.
tax treatment. These rules could affect Form 5500. File this form electronical-
how much interest you are allowed to Line 17 ly with the Department of Labor (at
deduct on Schedule C. efast.dol.gov) for a plan that does not
Generally, you allocate interest ex- Include on this line fees charged by ac- meet the requirements for filing Form
pense by tracing how the proceeds of the countants and attorneys that are ordinary 5500-EZ or Form 5500-SF.
loan were used. See chapter 4 of Pub. and necessary expenses directly related For details, see Pub. 560.
535 for details. to operating your business.
Limitation on business interest. You Include fees for tax advice related to Lines 20a and 20b
must file Form 8990 to deduct any inter- your business and for preparation of the
est expenses of this trade or business un- tax forms related to your business. Also, If you rented or leased vehicles, machi-
less you are a small business taxpayer include expenses incurred in resolving nery, or equipment, enter on line 20a the
(defined under Part III) or meet one of asserted tax deficiencies related to your business portion of your rental cost. But
the other filing exceptions listed in the business. if you leased a vehicle for a term of 30
Instructions for Form 8990. days or more, you may have to reduce
For more information, see Pub. 334 your deduction by an amount called the
If you must file Form 8990, figure or 535.
the limit on your business interest ex- inclusion amount. See Leasing a Car in
penses on Form 8990 before completing chapter 4 of Pub. 463 to figure this
amount.

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