IRS Form 1098 is a form primarily used to report mortgage interest to the
federal government that was received by a taxpayer during the course of the year. Mortgage interest can be gained through trading via individual, business or sole proprietorship; however IRS Form 1098 is not needed for partnerships, associations, trusts, estates, companies or corporations. IRS Form 1098 is also not needed if the individual was a co-borrower with one of the aforementioned entities.
For Mortgage Borrowers:
IRS Form 1098 is sent out by mortgage lenders to the mortgage borrowers and details the amount of mortgage interest paid during the tax year. If you have paid over $600 in interest in a year on your mortgage then the lender is required to send you a copy of the form by January 31 of the following year. Most lenders will actually send an IRS Form 1098 regardless whether threshold of $600 in interest has been reached or not.
IRS Form 1098 is beneficial as it will provide mortgage interests payments that can be deducted from your total taxable income and reduce the overall amount owed to the IRS. The mortgage interest on first and second homes is generally deductible for taxpayers that itemize their deductions. After IRS Form 1098 is received you will need to report the mortgage interest on line 10 of the Schedule A of the Form 1040.
For Mortgage Lenders:
Mortgage Lenders will need to provide their mortgage borrowers with IRS Form 1098 Copy B by January 31st of the following year if $600 or more of interest was received during the year. Additionally, IRS Form 1098 Copy A is due to the IRS by the February 28th. However, if the 1098 is filed electronically the deadline to send Copy A to the IRS is extended a month to March 31st. Extensions can also be sought if additional time is needed to provide IRS Form 1098 Copy A to the IRS.