A comprehensive guide to IRS Form 1098, which taxpayers use to report mortgage interest and related expenses totaling $600 or more. Learn about filing requirements, definitions, and key considerations.
Internal Revenue Service (IRS) Form 1098, also known as the Mortgage Interest Statement, is a form used by taxpayers to report the amount of interest and related expenses paid on a mortgage during the tax year when the total amounts to $600 or more. This form is filed by lenders and provides essential information for borrowers claiming deductions on their tax returns.
Form 1098 provides crucial data that helps taxpayers:
Detail Mortgage Interest: Amount of mortgage interest paid.
Report Points Paid: Points paid for securing the mortgage.
Enumerate Other Expenses: Pertinent expenses such as mortgage insurance premiums.
Any institution that received interest on a mortgage of $600 or more must file Form 1098 with the IRS and provide the borrower with a copy.
Box 1: Mortgage Interest Received: Reports the total interest received.
Box 2: Outstanding Mortgage Principal: Amount of remaining mortgage principal as of January 1.
Box 3: Mortgage Origination Date: When the mortgage originated.
Box 4: Refund of Overpaid Interest: Refunds of previously reported interest.
Box 5-6: Mortgage Insurance Premiums and Points Paid: Additional deductible expenses.
Borrower Details: Name, address, and taxpayer ID.
Lender Details: Issuer of the mortgage, including their EIN.
Electronic Filing: Preferred method using the IRS FIRE system.
Paper Filing: Requires submission of Form 1096 if filing on paper.
To IRS: By the last day of February (or March 31 if filed electronically).
To Borrower: By January 31.
Form 1098: Mortgage interest.
Form 1098-T: Tuition payments.
Form 1040: The U.S. Individual Income Tax Return where deductions from Form 1098 are claimed.
Schedule A: The part of Form 1040 where itemized deductions, including mortgage interest, are listed.
[Mortgage: A Loan Secured by Real Property]({< ref “/mortgages-and-real-estate-finance/mortgage” >} “Mortgage: A Loan Secured by Real Property”)
[Amortization Schedule: The Payment-by-Payment Map of a Loan]({< ref “/mortgages-and-real-estate-finance/amortization-schedule” >} “Amortization Schedule: The Payment-by-Payment Map of a Loan”)
[Loan-to-Value Ratio]({< ref “/mortgages-and-real-estate-finance/loan-to-value-ratio” >} “Loan-to-Value Ratio”)
[Fixed-Rate Mortgage: Meaning and Borrower Tradeoff]({< ref “/mortgages-and-real-estate-finance/fixed-rate-mortgage” >} “Fixed-Rate Mortgage: Meaning and Borrower Tradeoff”)