Do I Have to File Form 1098 for My Mortgage?
Understand Form 1098: Mortgage Interest Statement. Clarify your responsibilities and how to leverage it for tax savings.
Form 1098, the Mortgage Interest Statement, is a tax document that reports mortgage interest paid by homeowners. This form informs both the taxpayer and the Internal Revenue Service (IRS) about the amount of mortgage interest, and potentially other related expenses, paid during the tax year. It is relevant for homeowners preparing their annual tax returns, especially for potential deductions related to their home loan.
Who Files Form 1098
Homeowners do not file Form 1098. Mortgage lenders or loan servicers prepare and send this document to individuals who have paid at least $600 in mortgage interest during a calendar year. Lenders must provide a separate Form 1098 for each mortgage that meets this $600 interest threshold. The deadline for lenders to furnish this form to borrowers is January 31st of the year following the interest payment.
Why You Receive Form 1098
Homeowners receive Form 1098 to claim the mortgage interest deduction on their federal income tax return. This deduction is claimed on Schedule A (Itemized Deductions) of Form 1040. The form helps homeowners determine the total interest paid, which can reduce their taxable income if they itemize deductions rather than taking the standard deduction. Form 1098 may also report other deductible amounts, such as points paid to acquire the mortgage and mortgage insurance premiums.
What to Do If You Do Not Receive Form 1098
If you expect to receive a Form 1098 but it does not arrive, contact your mortgage servicer or lender. Lenders often make these statements available online through your mortgage account. Even without the physical form, you can claim your mortgage interest deduction if you have accurate records, such as year-end mortgage statements or payment histories, that show the total interest paid. The IRS allows taxpayers to claim eligible deductions as long as they can substantiate the amounts with their own records.
Understanding the Information on Form 1098
Form 1098 contains several boxes detailing your mortgage and potential tax deductions:
Box 1 reports the total mortgage interest received by the lender during the calendar year. This is the amount you will use when calculating your mortgage interest deduction.
Box 2 shows the outstanding mortgage principal as of January 1st of the reporting year, or the origination date if the mortgage began in that year.
Box 3 indicates the original date your mortgage was originated.
Box 4 lists any refund for overpaid interest from a prior year.
Box 5 reports any mortgage insurance premiums paid, which may also be deductible.
Box 6 details any points paid on the purchase of your principal residence, which can be deductible in the year they were paid.