Here’s How to Master Your Mortgage with the 1098 Form

The 1098 Form for reporting interest on mortgages

Taking a brief detour in PDFfiller‘s tax review, this post focuses on the IRS 1098 Form, or the Mortgage Interest Statement. This one is an important one for those looking to receive tax credits for interest paid on a mortgage throughout the year.

What is IRS Form 1098?

The 1098 Form is the Mortgage Interest Statement. This form is an IRS information return that is prepared by mortgage lenders and is issued to mortgage borrowers.  The form is required to be mailed to borrowers no later than January 31st, however, not all lenders adhere to this requirement. The form reports various information relating to the lender, the borrower and the mortgage. Typically, if property taxes are paid through escrow, property taxes paid during the year will also be reflected on the Form 1098.

Who must file IRS Form 1098?

File the 1098 Form  if you are engaged in a trade or business and, in the course of such trade or business, you receive from an individual $600 or more of mortgage interest on any one mortgage during the calendar year. You are not required to file this form if the interest is not received in the course of your trade or business. For example, you hold the mortgage on your former personal residence. The buyer makes mortgage payments to you. In this case, you are not required to file Form 1098.

What information do you need in order to complete IRS Form 1098?

Completing the Form 1098 is simple. The left side of the form reflects information relating to the lender and the borrower. The right side of the form (boxes 1-6) reflect information relating to the mortgage interest received from the borrower (Box 1), outstanding mortgage principal as of January 1st (Box 2), mortgage origination date (Box 3), refund of overpaid interest (Box 4), mortgage insurance premiums (Box 5), and points paid on purchase of principal residence (Box 6). Boxes 7-9 relate to the property and the address that is securing the mortgage.

For more information on filling out Form 1098, check out the following video:

What other forms are needed when you file IRS 1098 form?

There are three copies to the Form 1098, copies A, B, and C. Copy A of the form is submitted to the IRS. Copy B of the form is issued to the payer/borrower, and copy C of the form is for the lender’s records. The Form 1098 has to be accompanied by a Form 1096, which is a transmittal form.

Where do you file IRS 1120- Schedule D?

The mailing address for the Form 1098 and Form 1096 depends on the physical location of the business that is issuing the form. Refer to page 6 of the IRS webpage (General Instructions for Certain Information Returns) for more information regarding the mailing addresses.

When is IRS Form 1098 due?

The deadline is coming right up! If the 1098 Form is filed by mail, the IRS needs to receive it no later than February 28th.  So get started filling yours with PDFfiller today!