Learn how to use the 1098 form, like the 1098-T, 1098-C, and 1098-E forms, to report expenses and interest payments for mortgages, student loans, and more.
Not to be confused with the 1099 form, the 1098 form is a tax document that outlines interest payments on a property and other real-estate related expenses. This could include property like homes, mortgages, or even motor vehicles.
The kind of 1098 form you’ll need to use depends on what kind of property you’re dealing with and what kind of organization you represent.
There are also variants to the 1098 form like form 1098-T, the tuition statement used on income tax returns. The 1098-E tax form is another form used by students to outline student loan interest deductions from taxes.
Then, there's also the 1098-C tax form that has to do with donations and motor vehicles.
With all these different 1098 forms, tax filing can easily get confusing. Luckily there are tax services you can take advantage of to make filing taxes a breeze.
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What is a 1098 Form? The Mortgage Statement
The 1098 form is also called the Mortgage Interest Statement. The form 1098 mortgage statement is used to outline and report mortgage interest payments.
Specifically, the 1098 form reports mortgage interest payments of $600 and more. Your mortgage lender will send this document to you if they received $600 or more in interest from you in the previous tax year.
How is the 1098 form used?
Mortgage lenders will use the 1098 form to outline mortgage interest they’ve received from borrowers in the past year.
This document will then be sent to individual borrowers so they can report how much mortgage interest they've paid in the past calendar year on their tax returns.
What’s on the 1098 form?
The 1098 form includes key information about the mortgage lender and borrower. The 1098 form also includes information about the total amount of interest received by the lender and other key information about the mortgage.
- The recipient or lender’s contact information
- The recipient or lender’s Tax Identification Number (TIN)
- The payer or borrower’s Tax Identification Number (TIN)
- The payer or borrower’s contact information
- Monetary information including the account number, interest paid, mortgage principal, origination date, etc.
What is a 1098-T Form? The Tuition Statement
The 1098-T form can also be referred to as the Tuition Statement. This tax form is a college tax form that reports qualified tuition and other related expenses that students make. The information on this form can also help some students use the student loan tax deduction.
If you are an enrolled student, then you’ll probably receive this form from your school.
This document is given by the school to every enrolled student that pays tuition and other similar transactions like scholarships and grants.
How is the 1098-T form used?
First, the 1098-T form is sent to educational institutions from the Department of Education and their student aid program.
Educational institutions could include colleges, universities, vocational schools, or any other educational institutions that offer post-secondary education.
Then, these educational institutions send these forms to their currently enrolled students. Students can then use this 1098 form to report all of their qualified student expenses and maybe even apply for tax credits like the Lifetime Learning Credit.
This form includes key information like the tax filer and student's contact information. This IRS form also includes information outlining qualifying student expenses including tuition, scholarships, and grants.
- The filer’s contact information
- The filer’s employer identification number
- The student’s Tax Identification Number (TIN)
- The student’s contact information
- Monetary information about the student’s tuition, account number, tuition payments, scholarship money received, and grant money received
What is a 1098-E Form? The Student Loan Interest Statement
The 1098-E form can also be referred to as the Student Loan Interest Statement. This tax form reports the interest payments made on student loans.
If you have student loans and are currently making payments on those loans, then you’ll probably receive this form from whoever is servicing your student loans.
How is the 1098-E form used?
First, the 1098-E form is sent to student loan borrowers from their student loan servicers. The organizations and lenders who service your student loans will send this document to you.
Then, student loan borrowers can use this form when filing out form 1040 as they file their tax return.
The student loan and interest payment information on this form will determine whether you qualify for the student loan interest deduction on your federal tax return.
This tax form includes information about the student, the student loan, the student loan interest, and the loan provider or servicer. You can find some of the following information on this IRS form.
- The recipient or lender’s contact information
- The recipient or lender’s Tax Identification Number (TIN)
- The borrower or student’s Tax Identification Number (TIN)
- The borrower or student’s contact information
- Monetary information about the student loans like the account number and how much the lender received in student loan interest
What is a 1098-C Form? The Contributions of Motor Vehicles, Boats, and Airplane Statement
The 1098-C form can also be referred to as the Contributions of Motor Vehicles, Boats, and Airplanes Statement. This tax form is used by donor organizations to report contribution amounts for motor vehicles, boats, and airplanes.
How is the 1098-C form used?
If a donor organization receives any contributions in vehicles like cars, boats, or airplanes, then they’ll report the monetary value or sales of those vehicle donations using a 1098-C form.
On this form, the donor organization will be referred to as the “DONEE” and the person or organization that donated the items will be referred to as the “DONOR.”
If a donor gives a motor vehicle to charity, then they might have to get this form.
If the vehicle they donated has a value of $500 or more, then they might be able to get a tax deduction for this donation.
In general, the most they could get out of deduction would either be the value of the car when it was donated, or the value of the car that the charity sold it at, whichever is smaller.
This form consists of 4 copies, Copy A, Copy B, Copy C, and Copy D. Copy A is for the IRS, Copy B is for the donor, Copy C is for the donor's records, and Copy D is for the donee.
Each copy goes over information about the donor and donee and the monetary information for the charitable contributions.
Some of the information included on this tax form includes:
- The donee’s contact information
- The donee’s Tax Identification Number (TIN)
- The donor’s Tax Identification Number (TIN)
- The donor’s contact information
- Information about the donated items like make and model
- Monetary information about the donated items and their sale
- Signed certifications that the donated items will be used for their appropriate purposes
- Information about any items that were given in exchange for the donation, if applicable
