Buying a house comes with a lot of new expenses, but it also creates a number of potential new income tax deductions, including the mortgage interest you pay during the year. Your lender should send both you and the IRS a Form 1098 to document how much mortgage interest you paid during the year. Your lender is the first place to check when you think you should have received a Form 1098 and you haven’t received one for that year, but the reason you haven’t received one is simply that one isn’t required to be filed based on the tax laws.
TL;DR (Too Long; Didn't Read)
If your lender has not sent you a copy of Form 1098, you can contact them for a copy, but it's possible your lender wasn't obligated to prepare one if your mortgage interest did not exceed $600. Keep in mind that you don't need the document to deduct mortgage interest on your taxes.
Minimum Reporting Threshold
Your lender is only required to prepare a Form 1098 if your mortgage interest exceeds $600 for the calendar year. The $600 threshold also includes any deductible mortgage points paid during the year. For example, if your mortgage interest paid during the year is only $550, your lender may prepare a Form 1098 for you but isn’t legally required to do so.
Deadline for Filing
If required to prepare a Form 1098, your lender should provide you a copy of the Form 1098 by January 31 of the following year. For example, if you should receive your Form 1098 for the 2018 tax year by January 31, 2019. If you haven’t received a Form 1098 by the end of January, contact your lender to determine why one was not received.
No Form 1098 Received
If you didn’t receive a Form 1098, you can still claim the mortgage interest you paid as a deduction on your taxes. Instead of reporting the mortgage interest on line 10 of Schedule A, report the interest paid on line 11. In addition, if you bought your home from the previous owner and borrowed the money from that person, also include that person’s name, address and taxpayer identification number next to line 11 so that the IRS can ensure that interest is being properly reported as income by the person you’re paying.
Claiming Your Deduction
If you want to claim your mortgage interest on your taxes, you must itemize your deduction and give up your standard deduction. For the 2018 tax year, the standard deductions are substantially higher than in previous years. As a result, you need your itemized deductions to add up to a higher amount before any of your itemized deductions, including mortgage interest, will save you any money on your taxes.
For the 2018 tax year, the standard deduction is $12,000 for singles, $18,000 for heads of household and $24,000 for couples filing jointly. If your itemized deductions, including mortgage interest, don’t exceed your standard deduction, your mortgage interest won’t save you any money on your taxes.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."