In: Accounting
Does your 1098 show what you paid for real estate tax and interest if you sold your home in April? Or is it the total real estate tax and interest on the 1098 for the entire year? What exactly does the 1098 real estate tax and interest mean?
Form 1098 is basically “Mortgage Interest Statement”.
This form is used to report to Internal Revenue Services, the amount of Mortgage Interest and points paid to the lender during the year.
The mortgage lender is required to issue Form 1098 to the borrower , to enable him to get tac rebate on interest paid.
Form 1098 is required to be filed if the mortgage interest including points is more than $600.
If a mortgage is not secured by a real property, form 1098 is not required to be filed.
The form 1098 issued by the lender contains information on amount of mortgage interest received from the borrower in Box 1.
It also contains information on points paid(box2),Refund of overpaid interest(box3), Box 4 may be used by lender to inform Real estate taxes.
Filling up of box 4 and box 5 are not mandatory. But additional information given in these boxed may be helpful to the borrower for tax purpose.
Other details in form 1098 are the name, address and social security number of the borrower, lenders name, address etc.
The interest paid can be deducted on Schedule A(itemized deduction).
Form 1098 is required to be filed by any one receiving $600 more mortgage interest from an individual. Separate form should be filed for each mortgage