Form 1098, also known as the Mortgage Interest Statement, is issued by banks or mortgage lenders to document mortgage interest paid by borrowers. This interest can be deducted on Schedule A to help reduce the taxpayer’s adjusted gross income (AGI).
Steps to Add Mortgage Interest from Form 1098
1. Access Federal Information
From the left-side menu, select Federal Information to expand the dropdown of federal form categories.
2. Navigate to Deductions
Click on Deductions to open the Deductions List page.
3. Open Schedule A Form
Locate Schedule A and click Start.
4. Add Mortgage Interest Paid
Scroll down to the Interest Paid section.
Enter the mortgage interest details from Form 1098 received by the taxpayer.
5. Specify Additional Information
If the interest was paid to an individual instead of a financial institution, specify this additional information.
6. Additional Instructions
If the taxpayer paid less than $600 in mortgage interest and it was not reported on Form 1098, enter the amount on Line 8b of Schedule A.
If the interest was paid as points (prepaid interest), enter it on Line 8c.
7. Reporting Mortgage Interest for Business Purposes
If the mortgage interest is related to a business, farm, or rental property, report it under the appropriate tax form:
Schedule C – for a sole proprietorship
Schedule F – for farming
Schedule E – for rental properties
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