FAQs about Form 1098
What is a 1098 form?
Form 1098, Mortgage Interest Statement, is an IRA tax form that is used to report mortgage interest a lender received during the year. Mortgage interest is the amount of interest that the borrower pays in a year on a loan secured by real property. The reported amount can include points paid by the borrower at the time of purchase of a primary residence. The amount reported on Form-1098 includes Mortgage interest, points, certain mortgage insurance premiums and reimbursements of overpaid interest.
Who needs to file Form 1098?
Any person who is engaged in a trade or business and in the course of such trade or business receives mortgage interest of $600 or more from an individual. The trade or business need not be mortgage lending. Therefore, not only mortgage lenders but any entity who receives mortgage interest, such as real estate developers, Servicers, or certain collection agents need to file form 1098.
When is a Form 1098 Filed?
Form 1098 is required if the recipient receives mortgage interest and points of $600 or more from an individual during a year. Points paid for the purchase of the borrower's principal residence are reported on Form 1098 as well. For points to be included in the Form 1098, they must be calculated as percentage of loan amount and identified in the Settlement Statement (HUD-1) as “loan origination fee”, “loan discount,” “discount points,” or “points.” Form 1098 is also required to be filed if the amount of overpaid interest that was repaid to the borrower is $600 or more. If the lender is required to furnish a Form 1098 because the lender received at least $600 in interest then the lender must include the amount of overpaid interest even if it the repayment was less than $600.
How to file form 1098?
If you are required to file form 1098 you can file on paper. If filing on paper Copy A of the Form 1098 must be filed with the IRS and Copy B of Form 1098 must be provided to the borrower. You can use onlinefiletaxes.com to electronically file form 1098. When you choose online filetaxes.com you’re a copy of your form 1098 is sent to the IRS electronically and borrower’s copy is mailed out.
When is Form 1098 Due?
Form 1098 is filed in the year following the year in which the mortgage interest or points were received. The due dates are:
1. Copy A of the Form 1098 must be filed with the IRS by end of February 28 if filing on paper. For electronic filing the due date is end of March.
2. Copy B of the Form 1098 must be provided to the borrower by end of January.
What is the penalty for failure to file form 1098?
There are various penalties associated with failure to file 1098 forms correctly and timely. These penalties apply to paper filers as well as to electronic filers. There is penalty for failure to file, for filing late and for filing incorrect information. For more information please refer to Penalty for failure to file form 1098.
What goes on Form 1098?
Following information goes on form 1098:
RECIPIENT’S/LENDER’S name, address, and telephone number and RECIPIENT’S federal tax identification number (TIN) that received the mortgage interest.
PAYER’/BORROWER’S social security number, name and address.
Mortgage interest received from payer(s)/borrower(s): The total interest received during the calendar year. The interest may be on a mortgage, a home equity loan, or a line of credit or credit card loan secured by real property. Interest includes prepayment penalties and late charges unless the late charges are for a specific mortgage service. Interest does not include government subsidy payments, seller payments, or certain prepaid interest.
Points paid on purchase of principal residence: Points paid on the purchase of the payer of record's principal residence.
Refund of overpaid interest: Total refund or credit of a prior year(s) overpayment of interest.
Blank Box: This is an empty box where the IRS allows the lender to enter any other information that would be reported to the payer, such as the address of the property that secures the debt, real estate taxes, or insurance amount. Information contained in Box 4 is not required to be reported to IRS.
On this site we refer to recipient as the person who is entitled to receive the 1099 form. In case of 1098 recipient is the lender, but borrower is the person who receives the Copy B.
How do I file form 1098 using your service?
It is very easy to file using our service. First create your account by signing up. Then create filer and recipient accounts. In the next step create your forms. If you do not want to manually key in your information you have the option to upload your data. Once you have created your form you should check out and accept our terms of service. That is all you need to do.
What to expect after I have submitted my 1098 form using your service?
After you submit your form we will file with the IRS and mail out recipient (borrower) copies. If you have provided us recipient’s (borrower’s) email id, we would attempt to deliver their copies by e-Delivery. Learn what us e-Deliver here. After your forms are accepted by the IRS we send you a confirmation email.
I used your service to submit 1098 forms and the form has been submitted to the IRS. But there was an error. How can I correct the error?
If your form is already submitted to the IRS you will need to file corrected 1098 form. For more information on how to file a corrected return please
I filed a 1098 form using your service in error. The form should not have been filed. What can we do now?
If the form was not supposed to be filed you will need to submit a corrected 1098 form with 0 amounts to void the form. For more information on how to file a corrected return please
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Official IRS instructions for Form 1098 >>
Learn more about 1098 Form
Penalty for failure to file 1098 Form
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