There are many perks to homeownership, and tax deductions are just one of the many advantages that you may be able to enjoy. (Photo: Kelly Sikkema on Unsplash).

Michaela Phillips, Guaranteed Rate, Inc.

Michaela Phillips,
Guaranteed Rate, Inc.

It’s that time of year again: tax season! If you’re a homeowner or planning to become one, it’s helpful to be aware of form 1098 and understand its potential benefits. There are many perks to homeownership, and tax deductions are just one of the many advantages that you may be able to enjoy. Interested in learning whether you’re eligible for a tax deduction using form 1098? Here, I share the details on this form and how to request it.

What is Form 1098?
Form 1098 is the Mortgage Interest Statement that the servicer provides to the borrower. This form is used to report interest payments and expenses the borrower makes toward the mortgage during each tax year.

Borrowers that make a minimum of $600 in interest payments on a single property are eligible for a tax deduction. Once you’ve obtained form 1098 from the servicer and confirm that you’ve paid at least $600 in interest for the current tax year, you can file this form with the IRS to reduce your taxable income. You’ll need to itemize this deduction with income tax form Schedule A.

How do I obtain my 1098?
Your tax document will become available on or before January 31 of each tax year. To ensure that your 1098 arrives in a timely manner, be sure to check with the servicer to confirm that the correct mailing address is on file. In most cases, you can print your own form free of charge by logging into your account on the servicer’s site. If you’ve made payments to more than one servicer, please be aware that the deadline is February 15 to receive forms from all servicers.

Additional information
The servicer will send form 1098 to the primary borrower. In the case of multiple borrowers, you’ll need to determine which individual will file the form, as it can only be filed once. If you’d like to access 1098 forms from previous tax years, simply contact your lender. Most long-term lenders will send copies for each year that you request.

Homeownership provides a host of advantages that you’ll enjoy for years to come. If you’re already a homeowner, be sure to keep an eye out for your 1098 or contact your servicer for more information.
For those interested in purchasing a home this year, keep in mind that interest rates are historically low, so it’s a great time to buy.

By Michaela Phillips. Michaela is the Vice President of Mortgage Lending at Guaranteed Rate, Inc. Contact Michaela at 303.443.6292, e-mail [email protected] or visit NMLS: 312874.