What is Form 1098? Understanding The Different Types

Form 1098 tax forms report different types of payments or contributions that may be tax-deductible. There are different versions of Form 1098. They report on:  

  • Mortgage interest  
  • Charitable donations  
  • Tuition expenses  
  • Student loan interest  

You’ll use the information on these forms to calculate your deductions when filing your taxes with TaxSlayer. 

What is Form 1098?  

Form 1098, Mortgage Interest Statement, reports how much you paid in interest during the tax year, including prepaid “points” of interest. The form will be sent to you by the company that services your mortgage loan. If you choose to itemize your deductions, you can generally deduct mortgage interest on your tax return.  

If you, the homeowner, paid at least $600 in interest during the tax year, you should receive a copy of Form 1098 by January 31st. If you paid less than $600 in interest, the lender is not required to send the form, but you will probably still receive a copy. The home in question must meet the IRS’s standards, including:  

  • Basic living amenities  
  • Bathroom  
  • Sleeping areas  
  • Cooking facilities 

This can apply to stand-alone homes, mobile homes, townhomes, condos, ranches, boats, and yachts.   

Additionally, the mortgage itself must meet IRS standards. Some examples are:  

  • Home Equity Loans  
  • First Mortgages  
  • Second Mortgages  
  • Refinanced Mortgages 

What do the different boxes mean on Form 1098?  

  • Box 1 reports the interest you paid, not including points 
  • Box 2 shows any outstanding mortgage principal
  • Box 3 indicates the mortgage origination date
  • Box 4 reports the refund owed to you (if applicable)
  • Box 5 reports any mortgage insurance premiums
  • Box 6 reports any mortgage points you might be able to deduct

What is Form 1098-C?  

Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, reports the amount of a donated automobile, boat, or aircraft worth more than $500 to a tax-exempt organization. The donation’s recipient generally has 30 days after the donation to provide you with a copy of this form.  

The form provides information about the donation, including the type of vehicle, the identification number, the donation date, and its value.  

If you itemize and claim a vehicle deduction worth more than $500, you must attach Copy B of Form 1098-C to your return.  

For more information about charitable donations and determining the fair market value of your vehicle, read Deducting Charitable Donations of Clothing and Household Items. 

What do the different boxes mean on Form 1098-C?  

  • Box 1 shows the date you received the vehicle from the donor. 
  • Box 2a shows the mileage for motor vehicles only. 
  • Box 2b shows the year of the vehicle.  
  • Box 2c shows the make of the vehicle.  
  • Box 2d shows the model of the vehicle. 
  • Box 3 shows the vehicle identification number 
  • A checkmark in Box 4a indicates whether the vehicle was sold in an “arm’s length transaction to an unrelated party” 
  • Box 4b shows the date of sale 
  • Box 4c shows the gross proceeds from the sale 
  • A checkmark in Box 5a checkmark indicates that the vehicle will not be sold for money or other property. 
  • A checkmark in Box 5b certifies that the vehicle was sold well below market value for charitable purposes. 
  • Box 5c shows a detailed description of improvements or significant intervening use (like if the vehicle is being used to deliver meals on wheels, and its duration). 
  • A checkmark in Box 6a indicates if the vehicle was exchanged for goods or services. 
  • Box 6b shows the value of such goods or services 
  • Box 6c describes what (if any) goods or services were provided. 
  • A checkmark in Box 7 certifies that the donor may not claim a deduction for more than $500.  

What is a 1098-E?  

Form 1098-E, Student Loan Interest Statement, reports the interest you paid on your student loan(s). The institution you are borrowing from is only required to send you this form if you paid more than $600 in interest during the tax year. However, you may still receive one if you paid less than $600. You should receive this form by January 31st. TaxSlayer will walk you through the process of entering the information on this form and will calculate your deduction for you.   

Read also: Do I Qualify for a Student Loan Interest Deduction?  

What do the different boxes mean on Form 1098-E?  

Box 1 shows the interest you received on a student loan(s) during the year.  

A checkmark in Box 2 indicates that the loan origination fees and/or capitalized interest are not reported. 

What is a 1098-T?  

Form 1098-T, Tuition Statement, reports any school tuition you paid throughout the year. Schools are required to send Form 1098-T to you if you paid qualified education expenses during the tax year. Qualified education expenses include:  

  • Tuition  
  • Required enrollment fees   
  • Required course materials  

If your parents or guardian pay these expenses on your behalf, you will still receive Form 1098-T. You should be able to access this form online or receive a copy in the mail by January 31st.   

Read also: College Students: Are You Getting Your Education Tax Credits?  

What do the different boxes mean on Form 1098-T?  

  • Box 1 shows the amount of tuition you paid during the tax year.  
  • Box 2 will be filled if you have been billed for tuition but have not paid. If box 2 has an amount in it, you will not be able to claim any amount on your return. Beginning in 2018, Box 2 is reserved, and no information should be listed.   
  • Box 4 shows any adjustments the school has made to the qualified expenses reported in the previous year. If this box has an amount in it, you will need to file an amended return for that prior year.  
  • Box 5 reports any scholarships or grants you received.  
  • Box 6 shows any adjustments to scholarships and grants reported in the previous year. Just like with Box 4, if this box has an amount in it, you may need to file an amended return for the prior year.  
  • A checkmark in Box 7 indicates that the amount in Box 1 or 2 includes expenses for an academic term that begins in the first three months of the year following the year covered by the 1098-T.    
  • A checkmark in Box 8 indicates that the student is enrolled at least half-time.   
  • A checkmark in Box 9 indicates that the student is enrolled in a graduate program. 

TaxSlayer makes entering all these forms easy. Start for free today at TaxSlayer.com

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