IRS tax Form 1098 helps taxpayers to report their Mortgage interest statements. They use it to report their mortgage interests of $600 or more that they receive in the course of their trade or business in the tax year. Taxpayers have to file separate Forms for each of the mortgages. The $600 threshold was applied for each of the mortgages separately. They can use it to report mortgage insurance premiums of $600 or more received during the calendar year.
When should you file Form 1098?
File this form if you are engaged in a trade or business and received $600 as mortgage interest. If you didn’t receive this interest in the course of your trade or business, you need not file this Form. A mortgage is an obligation to secure the property. It could be land or anything built or growing on it. Real property is a home with a minimum living space of 400 square feet and a minimum width of 102 inches.
- Even if you are not in the lending business, you should file Form 1098, if you receive mortgage interest.
- A governmental unit receiving a mortgage from an individual of $600 or more should file this Form.
- A cooperative housing corporation is an interest recipient, who should file Form 1098, to report the amount received from its tenant stockholders. This rule applies only to tenant stockholders, who are individuals from whom the co-operative received $600 of interest during the year.
- Non-resident alien interest payer should file Form 1098 to report interest paid by a non-resident alien, if part of security for the mortgage, is real property located in the United States.
Special instructions to file IRS Form 1098
Following are the conditions for paying mortgage interest with the IRS.
- The taxpayers should file separate Form 1098 for each of their mortgages.
- To receive mortgage interest, you should be the primary loan borrower, and make active payments.
- If you have received less than $600 as interest in the mortgage, you need not file Form 1098.
- It is at your disposal to report mortgage interest of less than $600 with the IRS
- If there is an overpayment of the mortgage you can file 1098 for a refund.
- For mortgages of the previous years, you can file 1098 to seek a refund.
- You can also use it to report mortgage insurance premiums of $600 or more.
- You need not file this form if you received mortgage interest from estates, trusts, partnerships. This applies to individuals who are co-borrowers and trustees of these institutions.
Taxpayers need not include Form 1098 with their tax returns. Rather, they use the information given in Form 1098 to reduce their mortgage payments. While reviewing this Form, verify the personal information, including the name and address and accuracy of TIN.
Form 1098 is a mortgage interest statement. Taxpayers use it to report their interest and related expenses on the mortgage. You can seek more information about this tax Form and its filing requirements at Tax2efile and e-file it within the deadline through them.