It’s tax season. Take a deep breath. You still have a few days to either file your taxes or file for an extension. Whichever you decide to do, it is a good idea to understand the taxes you are paying, the deductions you can take, and the forms you need so you can claim them.
Did we just say deductions? We sure did! There are a lot of reasons to love being a homeowner. One of the biggest is the tax deduction.
As a homeowner, one of the primary tax deductions for which you qualify is the interest you have paid on your mortgage. The Federal Government allows you to deduct the taxes you paid your lender equaling $600 or more for your home and your second home (if you have one). Included in this sum are any points you may have purchased when you bought your home. (Points, also known as “discount points,” are fees paid directly to your lender at closing in exchange for a reduced interest rate.)
In order to claim this deduction, you’ll need a 1098 form. This form will be provided by your lender. If you’re doing your taxes yourself, you’ll use the information on this form to fill in the appropriate fields on your tax documents. If your accountant is handling your taxes, you’ll be able to pass your 1098 form off directly to them.
It’s worth noting that a lender is only required to send you a 1098 if your mortgage is used to secure what is known as “real property.”
Real Property – Land and generally anything built on it, growing on it or attached to the land.
This means that while your deduction claim may meet the criteria, you might not have a 1098 form to give you the figures you need. If this is the case, you’ll need to contact your lender and request one.
Have questions about your 1098 form? Contact one of our loan officers today.