TaxBandits Knowledge Base

What is Form 1098?

Form 1098, known as the Mortgage Interest Statement, is a document mandated by the Internal Revenue Service (IRS) that taxpayers employ to disclose the sum of interest and associated expenses disbursed in connection with a mortgage during a given tax year, provided the total amount exceeds $600. 

Form 1098 serves a dual purpose:

• Lenders utilize it to report interest payments exceeding $600 that they have received over the course of the year. The IRS gathers this information to ensure accurate financial reporting on the part of lenders and other organizations that receive interest payments.
• Homeowners employ it to ascertain the overall interest payments made during the year, which is crucial for calculating their mortgage interest deduction when completing their annual tax returns.