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It took 4 months, but I finally received my MI state tax return yesterday. Unfortunately, the state "adjusted it downward" to the tune of about $300. Accordingly to them, the bank mortgage statement I submitted in lieu of property tax bills was not an acceptable tax document, so the state refigured my homestead deduction based on the current taxable value and mill rates.

Sounds reasonable. If you claim a homestead credit in Kansas you have to include a copy of your tax bill.

The document that I submitted was a Form 1098 document from ABN AMRO. It says "Federal Treasury Internal Revenue Service Document" right on it. Since I own less than 20% of my home, my tax payments are escrowed and ABN AMRO pays the property taxes. Since they pay the taxes, I never receive a bill and have no record other than the 1098 form that ABN AMRO sends me at the end of the year.

The IRS, which is the agency responsible for the 1098, would like to see some tightening up on the numbers. Many jurisdictions include things such as trash and sewer with their real estate bills. Those fees aren't deductible, but impounds routinely include them in the amounts reported on the 1098.

Has anyone had anything like this happen? Is it even worth my while to dispute this?

Assuming your 1098 number is correct, it looks like it's worth $300.

Is there other documentation that I should receive? In order to dispute the readjustment, I need to submit further documentation, yet I don't know what else I could submit.

When my taxes were paid by an impound the taxing authority automatically sent me a copy of the bill, marked "Do not pay." Call the County Treasurer (or whoever) and ask for a copy of yours.

Phil
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