How To Enter 1098 On Turbotax

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Navigating your taxes can sometimes feel like deciphering an ancient scroll, especially when it comes to forms like the 1098. But don't fret! If you're a homeowner, understanding how to properly enter your Form 1098, the Mortgage Interest Statement, into TurboTax is crucial for maximizing your deductions. This lengthy guide will walk you through every step, ensuring you claim all the eligible mortgage interest and related expenses you're entitled to.

Understanding Form 1098: Your Homeownership Tax Buddy

Before we dive into TurboTax, let's briefly touch upon what Form 1098 is and why it's so important. The IRS Form 1098, "Mortgage Interest Statement," is provided by your mortgage lender if you paid $600 or more in mortgage interest during the tax year. It's your key to claiming the mortgage interest deduction, which can significantly reduce your taxable income.

This form typically reports:

  • Box 1: Mortgage interest received by the lender. This is usually the most significant number for your deduction.

  • Box 2: Outstanding mortgage principal. This is for informational purposes.

  • Box 3: Mortgage origination date.

  • Box 4: Refunds of overpaid interest.

  • Box 5: Mortgage insurance premiums (MIP). These can also be deductible in certain situations.

  • Box 6: Points paid on the purchase of a principal residence. These are essentially prepaid interest and can often be deducted.

Now, let's get down to business!

A Step-by-Step Guide to Entering Form 1098 on TurboTax

Are you ready to tackle your taxes and make sure you get all the deductions you deserve? Fantastic! Let's begin.

Step 1: Gather Your Documents and Access TurboTax

First things first, you'll need your official Form 1098, "Mortgage Interest Statement," from your mortgage lender. They are required to send this to you by late January or early February each year. Make sure you have the correct year's form!

1.1 Locate Your Form 1098

  • Check your mail: Most lenders send paper copies.

  • Log into your lender's online portal: Many financial institutions provide digital versions of your tax documents.

  • Don't have it? If it's well past February and you haven't received your 1098, contact your mortgage servicer immediately.

1.2 Sign In or Launch TurboTax

  • TurboTax Online: Open your web browser and go to TurboTax.com. Sign in to your account.

  • TurboTax Desktop (CD/Download): Launch the TurboTax software on your computer. Open your tax return file.

Step 2: Navigate to the Mortgage Interest Section

TurboTax is designed to make tax filing as straightforward as possible, and entering your 1098 is no exception.

2.1 Using the Search Bar (Recommended for Quick Access)

This is often the fastest way to get where you need to go.

  • In TurboTax Online: Look for the "Search" or "magnifying glass icon" at the top right of your screen.

  • In TurboTax Desktop: Look for the "Search Topics" option.

  • Type "1098" (or "mortgage interest") into the search box and press Enter.

  • From the search results, you'll likely see an option like "Jump to 1098" or "Enter mortgage interest statement (Form 1098)." Click on this link.

2.2 Navigating Manually (Alternative Method)

If you prefer to browse, you can typically find the section under Deductions & Credits.

  • Go to the "Federal" tab.

  • Select "Deductions & Credits."

  • Scroll down and look for a section related to "Home Ownership" or "Mortgage Interest and Refinancing (Form 1098)." The exact wording may vary slightly depending on your TurboTax version.

  • Click "Start" or "Update" next to this category.

Step 3: Enter Your Mortgage Information

Now you're in the right place! TurboTax will guide you through entering the data from your Form 1098.

3.1 Initial Questions

TurboTax will likely start by asking you some preliminary questions to determine your eligibility for certain deductions. Answer these accurately.

  • "Did you pay home mortgage interest?" Select "Yes."

  • You might be asked if you have a Form 1098. Confirm that you do.

3.2 Enter Lender Information

You'll be prompted to enter information about your lender.

  • Lender's Name: Enter the name of the financial institution that sent you the 1098.

  • Lender's Taxpayer Identification Number (TIN): This is usually found on your Form 1098.

  • Pay close attention to detail here! Any typos can cause issues.

3.3 Fill in the Boxes from Form 1098

This is the core of the process. Carefully transfer the numbers from your Form 1098 into the corresponding boxes in TurboTax.

  • Box 1: Mortgage Interest Received: This is the most critical figure. Enter the exact amount shown.

  • Box 2: Outstanding Mortgage Principal: Enter this if it's provided.

  • Box 3: Mortgage Origination Date: Input the date your loan originated.

  • Box 4: Refunds of Overpaid Interest: If you received any refunds, enter that amount.

  • Box 5: Mortgage Insurance Premiums (MIP): If there's an amount here, enter it. TurboTax will determine if it's deductible for you.

  • Box 6: Points Paid on Purchase of Principal Residence: This is a major deduction if applicable. Enter the amount carefully. If you refinanced, points may be handled differently (see common issues section).

3.4 Address of the Property

You'll need to enter the address of the property for which the mortgage interest was paid. This ensures the deduction is properly tied to your primary residence or a qualified second home.

Step 4: Handle Special Scenarios (If Applicable)

Sometimes, your mortgage situation isn't a simple one-to-one entry. TurboTax is equipped to handle these complexities.

4.1 Multiple 1098 Forms (Refinancing or Loan Servicer Change)

What if you refinanced your home or your loan was sold to a new servicer during the year? You might receive multiple 1098 forms for the same property.

  • Combine Amounts: In most cases, TurboTax will instruct you to add the amounts from Box 1 (Mortgage Interest) from all related 1098s together and enter the total as one entry. Do the same for Box 5 (Mortgage Insurance Premiums) and Box 6 (Points).

  • "Corrected" Forms: If one of your 1098s is marked "Corrected," use the information from the corrected form and discard the original.

  • TurboTax will often prompt you with questions like "Did you have more than one Form 1098 for this loan?" or "Did you pay off this loan?" Answer truthfully, and it will guide you.

4.2 Points (Box 6)

  • Original Purchase: If the points were paid when you originally purchased your principal residence, they are generally deductible in the year you paid them.

  • Refinance: If you paid points when refinancing your mortgage, they are typically deductible over the life of the loan. TurboTax will help you calculate the deductible portion for the current year. You may need to provide the loan term.

4.3 Seller-Paid Points

If the seller paid points on your behalf when you purchased your home, these are also reportable on your 1098 in Box 6 and are generally deductible.

Step 5: Review and Confirm Your Entries

Once you've entered all the information, TurboTax will often provide a summary screen for your mortgage interest deduction.

  • Carefully review all the amounts you've entered against your physical Form 1098.

  • Ensure that every box you had a value for on your 1098 is reflected accurately in TurboTax.

  • TurboTax will then integrate this information into your Schedule A (Itemized Deductions) if you choose to itemize. Remember, you can only claim the mortgage interest deduction if you itemize, and your total itemized deductions exceed your standard deduction.

Step 6: Continue with Your Tax Return

After confirming your mortgage interest entries, you can proceed with the rest of your tax return. TurboTax will automatically calculate the impact of your mortgage interest deduction on your overall tax liability.

  • Don't forget to save your progress regularly, especially if you're using the desktop version!

  • Keep your Form 1098 with your tax records for at least three years, in case the IRS has questions.

Common Issues and Tips

  • Missing 1098: As mentioned, contact your lender immediately. You can often still deduct qualifying mortgage interest even without the physical form if you have other proof of payment.

  • Blank Boxes: Do not enter 0 for blank boxes on your 1098 in TurboTax. Leave them blank. Entering a 0 can sometimes cause errors.

  • Understanding Itemizing vs. Standard Deduction: The mortgage interest deduction is an itemized deduction. This means it only benefits you if your total itemized deductions (which can include state and local taxes, charitable contributions, medical expenses, etc.) exceed your standard deduction. TurboTax will usually recommend the best option for you.

  • Mortgage Insurance Premiums (Box 5): The deductibility of MIP has varied over the years and can be subject to income limitations. TurboTax will handle these calculations for you based on current tax law.

  • Mortgage Interest Limits: For mortgages taken out after December 15, 2017, the deduction is limited to interest paid on up to $750,000 of mortgage debt ($375,000 if married filing separately). For mortgages before this date, the limit is $1 million. TurboTax accounts for these limits.


10 Related FAQ Questions

Here are 10 frequently asked questions about entering Form 1098 on TurboTax, along with quick answers:

How to: Access the 1098 entry section in TurboTax?

You can quickly access it by using the search bar and typing "1098" or "mortgage interest," then clicking the "Jump to" link. Alternatively, navigate to "Federal" > "Deductions & Credits" > "Home Ownership."

How to: Handle multiple 1098 forms for the same property in TurboTax?

If you refinanced or had a loan servicer change, add the amounts from Box 1 (Mortgage Interest), Box 5 (Mortgage Insurance Premiums), and Box 6 (Points) from all related 1098s together and enter the total as one consolidated entry in TurboTax.

How to: Enter "points" from Form 1098 in TurboTax?

Enter the amount from Box 6 into the corresponding field in TurboTax. If the points were for an original home purchase, they are generally fully deductible in the year paid. If for a refinance, TurboTax will help you prorate them over the loan's life.

How to: Deduct mortgage insurance premiums (MIP) using Form 1098 in TurboTax?

Enter the amount from Box 5 into TurboTax. The software will automatically determine if you qualify for the deduction based on your income and current tax law.

How to: Proceed if I haven't received my Form 1098?

Contact your mortgage lender or servicer immediately. They are required to provide it. You may still be able to deduct qualifying mortgage interest even without the form, using payment records, but having the 1098 is best.

How to: Correct an error after entering 1098 information in TurboTax?

Go back to the "Mortgage Interest and Refinancing (Form 1098)" section, locate the entry, and click "Edit." Make the necessary corrections and then continue.

How to: Know if I should itemize deductions to claim my mortgage interest?

TurboTax will help you determine this. It compares your total itemized deductions (including mortgage interest) with your standard deduction and recommends the option that results in the lowest tax liability.

How to: Enter mortgage interest if I paid less than $600 and didn't receive a 1098?

While your lender isn't required to send a 1098 for amounts under $600, you can still deduct the interest if you paid it. You'll enter it under the section for "mortgage interest not reported on Form 1098" and may need proof of payment (e.g., mortgage statements).

How to: Handle mortgage interest for a home equity loan (HELOC) or line of credit?

Interest on home equity loans or lines of credit taken out after December 15, 2017, is generally only deductible if the funds were used to buy, build, or substantially improve the home securing the loan. TurboTax will ask questions to clarify the use of funds.

How to: Ensure I'm claiming all eligible homeownership deductions in TurboTax?

Beyond mortgage interest, TurboTax will guide you through other potential homeownership deductions like real estate taxes, and in some cases, home energy credits. Always answer all questions truthfully and thoroughly as you proceed through the "Deductions & Credits" section.

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