If you have a mortgage, you’ll receive a 1098 form from your lender. Every lender that you hold a mortgage with is required to send you this form. This the form that your lender uses to let the Federal Government know how much interest you paid on your loan. You can then use this form when you file your taxes in the event that you are able to deduct the interest paid.
What is Reported on the 1098 Tax Form?
The 1098 Tax Form includes personal identifying information, showing the government that you are the person paying the loan. It also shows the amount of interest you paid over the entire year on your mortgage.
Any lender is required to send borrowers a 1098 for any interest they pay. In order for you to be able to deduct the interest, though, the mortgage must be on real property by IRS standards. In other words, it must be some type of home built on land that has enough living space, bathrooms, and a functional kitchen.
You will receive a 1098 form for every loan that you hold. In order to be able to deduct the interest on each loan, though, you must pay more than $600 for the year in interest. This applies to each individual loan, not the total of all interest paid on all of your loans.
Other Form 1098 Forms
The most common 1098 form is the Mortgage Interest form, but there are several other 1098 forms you may receive including:
- 1098 E – If you have any student loans, you’ll receive a form 1098 E from each lender. This form shows the interest you pay on your student loans throughout the year, much the same as you would for mortgage interest.
- 1098 C – If you donated a car or truck to charity this year, you’ll receive Form 1098 C. This form shows the type of vehicle you donated, the date you donated it, and the vehicle’s value for tax reporting purposes.
- 1098 – T – This form shows the details of any post-secondary tuition you paid throughout the year. This is what you would use to determine if you are eligible for any deductions based on the tuition paid.
If you receive a 1098 Form, make sure you give it to your tax advisor or use it when preparing your own taxes. It may help you save money on your tax liability as it can help give you the proof you need to be eligible for certain tax deductions.