Copy C For Recipient/ Lender To complete Form 1098 use Returns and The 2018 Instructions for Form 1098. City or town state or province country and ZIP or foreign postal code 8 Address or description of property securing mortgage see For Privacy Act and Paperwork Reduction Act Notice see the 2018 General Certain Information Returns. 9 Number of properties securing the 10 Other Account number see instructions Form 1098 Cat. No. 14402K Do Not Cut or Separate Forms on This Page...
2018 1098

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What is the IRS Form 1098?

The 1098 Form is the Mortgage Interest Statement. This form is an IRS information return that is prepared by mortgage lenders and is issued to mortgage borrowers. The form reports various information relating to the lender, the borrower and the mortgage. Typically, if property taxes are paid through escrow, property taxes paid during the year will also be reflected on the Form 1098.

Who needs to file the IRS Form 1098?

File the 1098 Form if you are engaged in a trade or business and, in the course of such trade or business, you receive from an individual $600 or more of mortgage interest on any one mortgage during the calendar year. You are not required to file this form if the interest is not received in the course of your trade or business. For example, if you hold the mortgage on your former personal residence and the buyer makes mortgage payments to you. In this case, you are not required to file Form 1098.

What other documents must accompany the IRS 1098 form?

There are three copies of the Form 1098, copies A, B, and C. Copy A of the form is submitted to the IRS. Copy B of the form is issued to the payer/borrower, and copy C of the form is for the lender’s records. Form 1098 has to be accompanied by Form 1096, which is a transmittal form.

When is the IRS Form 1098 due?

The copy B must be furnished to the payer by the 31st of January, 2017. Copy A is to be filed with the IRS by the 28th of February, 2017 or the 31st of March if filed electronically.

What information should be provided in the IRS Form 1098?

Completing the 1098 form is simple. The left side of the form reflects information relating to the lender and the borrower. The right side of the form (boxes 1-6) reflects information relating to the mortgage interest received from the borrower (Box 1), outstanding mortgage principal as of January 1st (Box 2), mortgage origination date (Box 3), refund of overpaid interest (Box 4), mortgage insurance premiums (Box 5), and points paid on purchase of principal residence (Box 6). Boxes 7-9 relate to the property and the address that is securing the mortgage.

What do I do with the form after its completion?

The completed form is filed with the IRS and forwarded to the payer.

Video instructions and help with filling out and completing 2018 1098
Instructions and Help about 1098 2018 irs form

Okay so one of the biggest misconceptions is is new buyers understanding really what the tax benefit the means of being able to write off the interest on a home so let's put a quick example together for you here let's make a couple assumptions let's first make the assumption you're buying a $350,000 house and you're putting 5% downs that means you're financing three hundred and thirty two thousand five hundred and let's just say five and a quarter percent interest so that makes your payment 1836 a month that's principal and interest but of that 1836 1450 for that each month is going towards interest so annually it's about 17 thousand 456 you'd pay an interest per year for this home under this example okay so let's take another sumption is to say your household incomes about eighty thousand and let's say you're in the twenty eight percent tax bracket so other than other deductions that you have your annual tax bills about twenty two thousand four hundred per year that you're obligated to pay in taxes before any deductions so in this case you have an interest write-off because you paid seventeen thousand 456 an interest for your home that actually makes your taxable income sixty two thousand five forty four so literally your taxable income can straight off the top of that interest write-off so instead of being taxed at eighty thousand you're not being taxed at sixty two five forty four now at twenty eight percent of that equals seventeen thousand five twelve per year you owe in taxes so that's an annual savings of about forty eight seventy seven so literally you get back in taxes or pay less in taxes of forty eight hundred dollars 48 seventy seven in this example that averages out to be about 407 per month so you can see owning a home and paying interest on a mortgage is a huge tax benefit now a lot of people really don't understand how it works so hopefully this has cleared that up a little bit for you