1098s are another subset of forms, much like 1099s, that have small but crucial differences between the different form types.
As we approach the end of 2020, tax season will seem closer than ever after the strange circumstances this year brought around for businesses and tax filing. Here are some answers to 5 common 1098 form and filing questions.
What is the deadline for filing 1098s?
Copy A of the 1098 deadline for filing on paper with the IRS is February 28. If you are filing electronically, the due date is the end of March.
Copy B must be provided to the borrower by the end of January.
What happens if there are errors on my 1098?
The most common errors associated with 1098 filing are: filing the wrong form type, reporting the wrong amount, reporting the wrong TIN or not including one at all, using the wrong year/version of the form, and not using the correct IRS form (you cannot download or copy).
If you make an error that you are unable to fix, the best thing to do is contact an accountant or tax professional for help. Once you have the updated information, you need to file a correction for each form that had errors.
What are the different types of 1098s and what are they used for?
The primary function of 1098 forms is to report payments and contributions you made that have the potential to be deducted from your taxable income.
There are seven different 1098 forms: 1098 (mortgage interest statement), 1098-C (contributions of motor vehicles, boats, and airplanes), 1098-E (student loan interest statement), 1098-F (fines, penalties, and other amounts), 1098-MA (mortgage assistance payments), 1098-Q (qualifying longevity annuity contract information), and 1098-T (tuition statement).
For a bit more on these forms and what they are used for, take a look at our other blog post.
What’s the most common 1098 form?
The most common 1098 form is, incidentally, the 1098 itself without any dashes or letters following it. This form is used to report mortgage interest. Each year, for each property you own, you should receive just one 1098 form – unless you refinanced the property during the year. This is a good thing to note in the tax year 2020 because many people refinanced this year due to reduced interest rates caused by the COVID-19 pandemic.
Can I e-file my 1098s?
1098 forms can be filed electronically through the FIRE (Filing Information Returns Electronically) system. They are also a part of the CF/SF (Combined Federal/State Filing) program, which means your 1098 federal forms can be forwarded automatically to participating states.
For full filing instructions, you can visit the IRS website.
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