Instructions for Filling Out Form 1098

Instructions for Filling Out Form 1098

Written by 
Pilot Team
October 18, 2023
Instructions for Filling Out Form 1098

This document offers a comprehensive guide on completing Form 1098, which is used to report mortgage interest received from individuals during a year. It covers various aspects, including filing requirements, mortgage definitions, reporting points and prepaid interest, and handling overpaid interest reimbursements.

What is Form 1098?

Form 1098, also known as the Mortgage Interest Statement, is used to report mortgage interest of $600 or more received during the year in the course of a trade or business from an individual, including a sole proprietor. The purpose of this form is to report mortgage interest received from borrowers during the calendar year, covering interest on mortgages, home equity loans, lines of credit, or credit card loans secured by real property. Key components of Form 1098 include the recipient's/lender's and payer's/borrower's information, account number, mortgage interest received, outstanding mortgage principal, mortgage origination date, refund of overpaid interest, mortgage insurance premiums, points paid on purchase of principal residence, address of property securing mortgage, number of mortgaged properties, and other relevant information.

Who Must File Form 1098?

Entities that need to file Form 1098 include those engaged in a trade or business who receive $600 or more of mortgage interest from an individual during the calendar year, governmental units or subsidiary agencies receiving mortgage interest of $600 or more from an individual, cooperative housing corporations reporting interest received from tenant-stockholders, collection agents receiving reportable interest payments on behalf of someone else, foreign interest recipients meeting certain conditions, and entities that have designated a qualified person to file Form 1098 and provide a statement to the payer of record.

Form 1098 Tax Filing Deadlines and Due Dates

The general due dates for this form are as follows:

  • January 31: Provide the borrower with a copy of Form 1098.
  • February 28: Paper file Form 1098 with the IRS.
  • March 31: Electronically file Form 1098 with the IRS.

Please note that these dates may be subject to change, and it's always a good idea to verify the current due dates with the IRS or a tax professional.

Form 1098 Late Payment Penalty

Although the specific late payment penalty for Form 1098 is not explicitly mentioned in the instructions, it's important to file the form on time to avoid potential penalties. Late filing or failure to provide accurate information may result in fines or other consequences. To ensure compliance, it's recommended to consult with a tax professional or the IRS for guidance on penalties and deadlines.

Step-by-Step Instructions for Form 1098

Here are the steps to fill out Form 1098:

  1. Fill in the recipient's/lender's name, address, and telephone number in the designated box.
  2. Fill in the payer's/borrower's name and address in the designated boxes.
  3. Provide the account number, if applicable.
  4. In Box 1, enter the mortgage interest received from payer(s)/borrower(s) during the year.
  5. In Box 2, enter the outstanding mortgage principal as of January 1 of the current year.
  6. In Box 3, enter the mortgage origination date.
  7. In Box 4, enter the refund of overpaid interest, if applicable.
  8. In Box 5, enter the mortgage insurance premiums received during the year, if applicable.
  9. In Box 6, enter the points paid on the purchase of the principal residence, if applicable.
  10. In Box 7, enter the address of the property securing the mortgage.
  11. In Box 8, enter the address or description of the property securing the mortgage, if different from Box 7.
  12. In Box 9, enter the number of mortgaged properties, if applicable.
  13. In Box 10, enter any other relevant information, if applicable.
  14. In Box 11, enter the mortgage acquisition date, if applicable.

How to Submit Form 1098

To submit Form 1098, ensure that you have accurately filled out all the required information, including mortgage interest received, outstanding mortgage principal, mortgage origination date, and other relevant details. Once completed, you can either paper file or electronically file the form with the IRS by the specified due dates.

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