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Instructions for Filing Form 1098

Are you a homeowner who paid mortgage interest, points, or mortgage insurance premiums on your mortgage loan last year? If so, you may receive Form 1098 from your lender. This tax form shows how much mortgage interest you paid during the year, which you can use to claim a deduction on your income tax return. Filing Form 1098 accurately and on time is crucial to avoid issues with the IRS and ensure that you receive the maximum tax benefits. In this guide, we'll walk you through the process of filing Form 1098 as a borrower, including what information you need to gather, when and where to file, and how to fill out the form correctly. By following our simple instructions, you can take the stress out of tax season and ensure that you're getting the most out of your mortgage interest deductions.

What is Mortgage Interest Statement (Form 1098)?

Form 1098 is a document you get from your mortgage lender. If you paid more than $600 in mortgage interest, points, or mortgage insurance premiums during the year. Your income tax return can be amended based on the information on this form. This form is also sent to the IRS for verification.
(Download form 1098).

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: 

Form 1098-C

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.

Bottom Line

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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