Who Uses Form 1098?
Doug Jackson, a Certified Financial Planner (CFP) and Enrolled Agent with the IRS, explained to The Balance via email that the 1098 Form is used by lenders to report mortgage interest payments, as well as mortgage insurance premiums, points, and more to the IRS. The information is reported directly to the IRS and to taxpayers. You might receive more than one Form 1098, depending on the number of mortgages on which you pay interest. It’s common to receive more than one of these forms if you refinanced your property during the tax year: one from the first lender and one from the new lender. Form 1098 will help you if you plan to itemize your deductions so that you can claim the mortgage interest deduction.
Types of Form 1098
There are a few types of Form 1098. It can be helpful to understand the differences between them when you prepare your tax return.
Form 1098-E
You will receive a Form 1098-E, the Student Loan Interest Statement, if you made student loan payments. You may be eligible to claim a tax deduction for a portion of the interest you paid.
Form 1098-T
Form 1098-T, the Tuition Statement, reports tuition expenses paid by students. This form can lead to a tax credit or it might be an adjustment to taxable income. Eligible educational institutions will file a 1098-T form for every student who is enrolled who makes a reportable transaction. Insurers also file the 1098-T if they made any refunds or reimbursements to students for qualified tuition and education expenses.
Form 1098-C
Donee organizations must file Form 1098-C for any contributions of qualified vehicles with a claimed value of more than $500. Qualified vehicles include those that are primarily manufactured to drive on a road, highway, or public street. Boats and airplanes also qualify.
What To Do If You Don’t Receive Form 1098
Jackson recommends calling your mortgage lender to inquire about Form 1098 if you don’t receive it in the mail. You might also create an online account with your lender to check your statements and history. You may be able to download it from an online portal.
Can Form 1098 Be E-Filed?
Yes, businesses and lenders can e-file Form 1098. The company must have access to software that generates a file according to the specifications in IRS Publication 1220. The IRS doesn’t provide a fill-in form option for businesses.
How To File Form 1098
You should submit any Forms 1098 you receive when you file your annual tax returns. Whether you file your taxes yourself with online software or work with a tax advisor or accountant, Form 1098 is easy to file. Just plug in some numbers and double-check it for accuracy, Jackson said.
Benefits of Form 1098
Jackson said Form 1098 is one of the more straightforward forms you will run into when you’re filing and paying your taxes. “Unlike Form 1040, which aggregates information for the entire tax return, Form 1098 is simply used to report information,” Jackson said. “Given its simplicity, I can’t think of any issues I’ve had with Form 1098. As long as the information on the form is reported correctly by the lender and taxpayer to the IRS, there should be no issues.”
