A mortgage interest statement is IRS Form 1098. Businesses and lenders use this tax form to declare mortgage interest payments of $600 or more that have been made to them.
Form 1098 Definition and Samples
Mortgage interest that a lender or company receives over the course of the year is reported to the IRS on Form 1098. It is employed when annual interest payments total $600 or more. 1 You may have paid the interest as a consumer or received it from a person or single proprietor as part of the operation of your trade or business.Who Uses the 1098 Form?
The 1098 Form is used by lenders to record mortgage interest payments, as well as mortgage insurance premiums, points, and more to the IRS, according to Doug Jackson, a Certified Financial Planner (CFP) and Enrolled Agent with the IRS, who explained this to The Balance via email. Taxpayers and the IRS both receive the information directly. Depending on how many mortgages you pay interest on, you can get more than one Form 1098. If you refinanced your home during the tax year, it's typical to receive two of these forms: one from the original lender and one from the new lender. If you receive interest from a personal residence, you are exempt from filing Form 1098. If you intend to itemize your deductions in order to qualify for the mortgage interest deduction, Form 1098 will be useful.Form 1098 variations
There are various Form 1098 varieties. When preparing your tax return, it can be useful to be aware of their distinctions.Form 1098-E
If you have made paid student loan payments, you will get a Form 1098-E, the Student Loan Interest Statement. A part of the interest you paid may be deductible from your taxes. If interest collected from the borrower in 2021 was $600 or more, federal loan servicers must disclose payments on IRS Form 1098-E by January 31, 2022.Form 1098-T
The Tuition Statement, or Form 1098-T, lists the tuition costs that students have paid. This form can result in an adjustment to your taxable income or a tax credit. Every registered student who conducts a reportable transaction will have a 1098-T form filed by eligible educational institutions. If an insurer paid out any refunds or reimbursements to students for admissible tuition and education costs, they must also file a 1098-T.Form 1098-C
Any donations of qualifying cars with a stated value of more than $500 must be reported by the donee organizations on Form 1098-C. Qualified vehicles are thoseVehicles that are primarily designed to be driven on a road, highway, or public street are considered qualified vehicles. Aircraft and boats are also acceptable. What It's Used For in Brief- Mortgage interest 1098
- 1098-E Interest on Student Loan Payments
- 1098-T Education costs
- 1098-C Donations of eligible vehicles
The Location Of Form 1098
According to Jackson, you'll most likely receive Form 1098 in the mail along with your other tax documents. Mortgage lenders typically send out this paperwork well in advance of the deadline for filing taxes.What to Do If Form 1098 Is Not Received
If you don't get your Form 1098 in the mail, Jackson advises calling your mortgage lender to ask about it. You can also open an online account with your lender to review your statements and history. It can be available for download from a website.Can Form 1098 Be Filed Online?
Both companies and lenders may electronically file Form 1098. The business must own software that can produce a file in accordance with the guidelines in IRS Publication 1220. Businesses cannot use fill-in forms offered by the IRS. Businesses could want to file electronically rather than on paper since, according to Jackson, doing so is frequently simpler and helps to avoid arithmetic errors while transferring information to your Schedule A.Form 1098: How to File
When you complete your yearly tax returns, you should include any Forms 1098 you receive. Form 1098 is simple to file, whether you do your taxes yourself using online software or with the help of a tax counselor or professional. Simply enter some numbers and verify the accuracy, said Jackson.Form 1098 advantages
When it comes to filing and paying taxes, Jackson said Form 1098 is one of the simpler forms you will encounter. According to Jackson, Form 1098 is only used to report information, as opposed to Form 1040, which collects data for the complete tax return. I can't recall ever having a problem with Form 1098 because of how straightforward it is. There should be no problems as long as the lender and taxpayer accurately report the information on the form to the IRS.Main points
- Mortgage lenders provide homeowners with Form 1098 to report mortgage interest and other payments, such as mortgage premiums.
- Businesses that receive $600 or more in mortgage interest from individuals each year are required to file Form 1098.
- Other 1098 forms detail paid tuition, interest on student loans, and some charitable donations.
- For homeowners, Form 1098 is rather simple and shouldn't pose any challenges during tax season.
