What is Mortgage Interest Statement (Form 1098)?
Form 1098 is a document the IRS requires to be filed by certain people with mortgages on the interest that was paid during the year. This document aims to help individuals to claim paid mortgage interest rates on their taxes (Download form 1098).
The form indicates the amount of interest you paid on your mortgage during the year. There are various best tax relief companies that can walk you through step by step in filing form 1098. Get started with one.
Who should fill a 1098 form?
Form 1098 should be filed by the person who paid the interest on the mortgage, not the mortgage company.
The following are a few examples of people who might benefit in filing a 1098 Form:
- Homeowners who paid interest on a mortgage in 2018
- Co-owners of property who paid interest on a mortgage in 2018
- Mortgagees (lenders) who received interest payments in 2018 on a mortgage they originated
- The executor of a decedent’s estate who paid interest on a mortgage in 2018
- The holder of a mortgage assigned to them in 2018
There are other instances where Form 1098 should be filed, but the examples above are the most common.
How to File Form 1098: Mortgage Interest Deduction
If you do not receive a statement or lose your statement, you may contact the Mortgage interest deduction is a popular tax deduction that may save taxpayers thousands of dollars each year. The deduction is available for homeowners who pay interest on a mortgage for their primary residence. Form 1098 will need to be filed with the IRS if any of the above conditions apply. It is due by February 28th each year
When looking at your statement, people recommend keeping an eye on 11 boxes. Here’s how to fill 1098:
- Box 1: This box indicates profit gained from borrower
- Box 2: This box indicates total amount owed
- Box 3: This box indicates the date your mortgage started
- Box 4: This box indicates the amount paid over mortgage profits that were reversed
- Box 5: This box indicates all mortgage insurance that you are paying
- Box 6: This box indicates mortgage points that may be deducted
- Box 7 to 11: These boxes indicate all your information about mortgage and your property
Related Tax Form (1098)
There are other three related 1098 tax forms:
The Form 1098-C is used to report and record charitable vehicle donations to charity organizations that use the vehicles or order them at a low price. It’s filed and proceeds by the concerned organization, with information including date purchased, make of car, VIN, and value of the automobile.
1098- Form E
The amount gained on successful student loans is reported on Form 1098-E. The taxpayer can deduct the profit processed, which will be shown on a form showing how much profit was processed in that year. If at least six hundred dollars worth of interest was paid during the tax year, it is sent by the lender; however, if less than six hundred dollars.
1098- Form T.
1098- Form T is a tax document that many educational institutions include with their financial data. It provides information on advanced-secondary fees and related expenses during the year. The form is filled by the school and may be utilized to claim education-related minus and credits, such as the Tax Credit of American Opportunity (AOTC) and the future learners. This form shows documents of any scholarships or subsidies received by the institution that may decrease the taxpayer’s allowed costs or expenses.
Instructions for filling out form 1098 are available on the IRS website. There are limits on the amount of home mortgage interest that can be deducted, so taxpayers should always keep records in case they are audited by the IRS. Follow them carefully when filling out or contact IRS customer care for more information.
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