The information in this article is up to date through tax year 2019 (taxes filed in 2020).
What is Form 1098?
The official name of Form 1098 is Mortgage Interest Statement. It reports the amount of interest and other expenses you paid on a home mortgage during the tax year.
Who needs to file Form 1098?
The lender provides this form to the borrower for their real property. If you, the homeowner, paid at least $600 interest on your home in one year, the lender is required to send you a copy of Form 1098 by January 1st of the following year. The home in question must also meet IRS standards including:
- Basic living amenities
- Sleeping areas
- Cooking Facilities
This can apply to stand-alone homes, mobile homes, townhomes, condos, ranches, boats, and yachts.
In addition, the mortgage itself must meet IRS standards. Some examples are:
- Home Equity Loans
- First Mortgages
- Second Mortgages
- Refinanced Mortgages
What happens if the interest I paid is not reported on Form 1098?
If you did not receive Form 1098 from your lender or mortgage company, you can contact them and request the form.
If you did not go through a mortgage company, but through an individual, use this form to report the amount you paid in interest. You will also need to record the individual’s personal information, including their name, Social Security Number, and address if you plan on deducting this interest on your tax return.
What items need to be reported on Form 1098?
Box 1 reports the total amount of mortgage interest you paid to the mortgage company. This is the amount that can be deducted on a Schedule A as an itemized deduction if you are itemizing.
Box 2 reports the number of points. These points represent the interest you paid in advance to improve your rate on your mortgage. Some taxpayers may also be allowed to deduct these.
Box 3 is usually left blank. If you overpaid your interest, the lender will report any refund or credit for that year here.
Box 4 can report many types of information that the lender needs to communicate to the homeowner. This can include:
- Real estate taxes
Box 5 is typically used for real estate taxes if they are not reported in box 4.
For information on Form 1098-T, read Is My College Scholarship Taxable?