Form 1098 Definition
The IRS uses the form 1098 for the purpose of gathering information upon an individual’s amount of interest payments and mortgage payments throughout the year. 1098 reporting is beneficial because it allows an individual to claim a 1098 deduction on the tax return.
Form 1098 Explanation
The 1098 form often times is there to help individuals realize their deductions. This is quite important because the form 1098 deduction will effectively reduce the amount of taxable income, meaning that the individual will not have to pay taxes on the interest and mortgage payments. The sorts of payments that are allowed are the mortgage payments on real estate, student loans, and vehicle loans. There is a 1098 IRS form for each of these items depending on what the individual is trying to claim as a 1098 deduction. There is even a 1098-t form which allows an individual to claim tuition fees as a deduction. Overall, the 1098 form is an effective way for individuals to reduce their amount of taxable income and save money.