What is a 1098 Form
1098 tax form is an IRS tax document. A taxpayer uses a mortgage interest tax form to file interest and similar expenditures relating to a mortgage. In addition, an IRS form 1098 is used during a tax year as soon as the total amount is $600 and more. Likewise, expenditure captured under this form includes prepaid interest paid to enhance the credit rating for a mortgage.
Uses of 1098 Forms Mortgage
IRS 1098 is used for two reasons. These uses are discussed below.
A lender can use the tax 1098 form to file interest payments equal to or more than $600. However, filing is not made until the amount reaches $600. The IRS requires lenders to send a 1098 IRS form to their clients to make sure all lenders and similar businesses report interest payments they received.
A homeowner uses form 1098 mortgage to calculate total interest paid within a year. This determination is usually made when taxpayers calculate their annual interest deductions for a mortgage to be used for tax returns.
How to Get Form 1098
Getting a 1098 mortgage interest document is relatively easy. Lenders must send this document to their clients if they are eligible. In addition, you can find more information about the document by going through the form 1098 instructions.
Mortgage Tax Form Eligibility
To be eligible for property tax form 1098, homeowners must pay at least $600 in interest or points towards their mortgage. Therefore, a person that does not pay up to $600 will not get the mortgage 1098 form. The lender that receives the interest must give this document to a homeowner. However, the person that receives the document must have a property regarded as real property. As such, real properties include
- Suburban home;
- Apartment complex.
The property that qualifies must possess a layout that makes it habitable for living. Therefore, the property should have a living room, bathroom, bedroom, and cooking area. Likewise, the mortgage should be qualified as stipulated by the IRS for a homeowner to receive a 1098 form mortgage.
Using 1098 Mortgage Form
It is not required for a taxpayer to include a 1098 form when filing their taxes. The IRS usually has the information the document contains. Instead, a taxpayer will want to utilize the information on the form when they want to deduct mortgage payments. In addition, using this form is super easy if a taxpayer is filing their taxes electronically. A 1098 tax form has 11 boxes. These boxes contain the following information. Box 1 – states mortgage interest paid by the borrower. Box 2 – presents the outstanding mortgage total. Box 3 – date of commencement Box 4 – overpaid interest refund Box 5 – insurance premiums Box 6 – the points used for principal residence purchase Box 7 to box 11 – additional information about property and mortgage There are several form 1098 types. An example is the student loan tax form, which includes 1098 T and 1098 E.
Please check other IRS forms: