Why it matters
The form is the support for a mortgage interest deduction on Schedule A. The taxpayer should check that the amount matches the loan and the property, especially after a refinance or a loan sale.
Example
A client pays mortgage interest during the year. The lender sends Form 1098, and the preparer uses the reported amount in the itemized deduction calculation, along with the property tax statement.
Related terms
Questions about Form 1098
Does Form 1098 prove the mortgage interest is deductible?
It reports the interest paid, but the taxpayer still needs to meet the rules for the loan and the property. A mortgage on a rental property is generally treated differently from a mortgage on a home.
What if the client does not receive Form 1098?
The client can use the lender's annual statement or the closing documents, but the form is the best record. Ask the lender for a copy if it is missing.