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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.