Most people are familiar with the tax forms W-2 and 1099. They're the ones used to report wages and potentially taxable income. Form 1098 is the flip side of those two. It's used to report money you paid out during the year which may be tax breaks for you. 1098s come in a variety of flavors, including 1098-T for tuition paid, and the most common, the 1098 mortgage interest statement.
1098 Mortgage Interest Statement
If you own a home, this may be the best form you get in the mail during tax season. The 1098 MIS indicates how much mortgage interest you paid during the year. It's also got boxes for points, real estate taxes, and, in some cases, private mortgage insurance paid. All of these are deductions you can take for your primary residence and second home. Report the amounts from 1098 MIS on Schedule A (Itemized Deductions) to take this very advantageous tax break. The lender will send a separate form for each mortgage.
1098-T Tution and Fees
If you or one of your dependents is attending any college or trade school, be on the lookout for this form in February. It shows how much tuition you paid. You may qualify for one of several generous education credits, which lower your tax liability dollar-for-dollar. One of them may be the American Opportunity Credit, which is worth up to $4,000 per student per tax year. Use the amounts from the 1098 on IRS Form 8863 to calculate how much credit you can take.
1098-E Student Loan Interest
If you paid back any student loans during the tax year, you'll want to wait until you get your 1098-E before you file a return. That form shows how much interest you paid on those loans. You get a deduction of up to $2,500 for this interest, and you can get it even if you don't itemize. Transfer the amounts from 1098-E to line 33 of Form 1040, or line 18 of Form 1040A.
1098-C Charitible Contribution
If you donated a vehicle worth more than $500 to charity, that organization should give you a Form 1098-C. This charitable contribution goes on your Schedule A of your taxes. If you donate more than one car in the tax year, you'll get a form for each one.
Electronic 1098 Access
Many educational and financial institutions have online versions of these forms. In many cases, they're available in early January if you want to get a head start on your taxes. You should find them at the school or bank website under "My Account" and "Tax Forms." If you can't, call the institution and ask if it posts electronic versions. You can print a copy for your records, but it's not necessary to send one to the IRS -- they'll have one of their own on file.
- Internal Revenue Service: Form 1098, Mortgage Interest Statement
- Internal Revenue Service: Form 1098-T, Tuition Statement
- Internal Revenue Service: Form 1098-E, Student Loan Interest Statement
- Internal Revenue Service: Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes
- Internal Revenue Service Publication 17: Your Federal Income Tax: Student Loan Interest Deduction
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