If you are a mortgage payer, and the interest you have paid throughout the year exceeds a certain sum, your lender has to provide you with the specific legal template: the IRS Form 1098.
This multipurpose form is used to report how much of an interest a borrower has paid in a specific period (a year). If you are the one who has borrowed the money, the form may help to deduct your taxes. Generally, the document is used by:
By this record, a creditor notifies about the amount of interest received from a borrower. Reporting is compulsory if a borrower pays more than 600 US dollars.
Loaners will use the information inserted in this template to add data to their tax returns correctly and state how much they have paid as interest during the considered year. They can have their taxes deducted if creditors file this form.
You should know that you, as a borrower, do not have to submit the form by yourself. The form is sent to the IRS by your lender. Then, you can use the form when preparing your tax return, and the IRS can check the information you include there because the lender has submitted the form previously.
The form relates only to the properties that can be called “real estate.” Basically, the land itself and all places where a person can live that have certain facilities (where you can make food, sleep, and take a shower) are included in this term.
If you act not as an individual taxpayer but as an entity or partnership, please note that you do not have to create this form.
If you, for some reason, have lost the paper originally sent to you by the lender, it is not a problem. Even though you can find the official template on the IRS website, for your convenience, we have developed a form-building software that you can use to get the same IRS Form 1098 template. You do not need to switch between tabs on your browser or search for another website anymore: you may obtain the form right here.
Filling out this form might seem complicated at first glance. But no worries: we are here for you to help and show you how to make your own record quickly. Continue reading to understand how it works.
As we have told you before, the proper template is essential, and if you have lost or damaged yours, you can get it from our website.
The “Copy A” section printed in red ink should be skipped by signatories. They do not have to include this page in the form and file it.
You should proceed to the next page where the “Copy B” section is included and start filling out the offered chart.
If you fill out the template given to you by your lender, skip this step because they should have completed the designated blank boxes by themselves. If you prepare the form fully by yourself, ask for the needed info: full address, phone number, and name. Then, insert their TIN (or tax identification number).
Your TIN also should be included. Add it to the suitable blank box.
You have to introduce yourself as a payer and indicate your full address, too. If the lender has given you an account number that distinguishes you from other borrowers, insert this number as well.
Then, proceed to the right-hand side of the form and insert how much you have paid to the lender as interest.
Next, write the amount you still should pay to the lender.
This date is also called the “origination” date. Write the date in the relevant blank box.
If you have paid more interest money than needed, and some of it were returned, write the sum in this blank field.
In case you also pay insurance premiums for your mortgage, write the sums here.
If you have paid with any points for your current place of living, enter the sum here. They might be deducted by payers later. For more information, check Publication 936 issued by the IRS.
If this is the same address as your principal property has, put a tick in an empty designated box. If not, include another address in the following box. Then, indicate how many real estate pieces secure the mortgage. The lender also has to fill out the “Other” blank field and add the date when they acquired the mortgage (if needed).
There is a “Copy C” section that comes after a “Copy B” section that you have just filled out. Duplicate all the info you have added to the template.
When you have finished working on your record, remember to go through the paper again and read everything again. You have to ensure that the information you add is truthful and correct. If public authorities somehow discover that you have reported the wrong data, you may be penalized.
After the template is filled out and everything is checked several times, return the document to the lender, so they submit it to the IRS. You, as a payer, do not have to deliver the form to the public authorities: the creditor should do it.
If you are the lender who wonders how to send the form, you can do it by either regular mail or a digital system of the IRS (also called the “e-file”). The deadline is normally the last day of February (depends on the year) if you file via regular mail or March 31 if the form is submitted digitally.