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Tom Westerholm is a Life & Trends Reporter for Newsweek based in Michigan. His work is focused on reporting on trending topics. Tom joined Newsweek in 2023 from Boston.com and previously worked at MassLive. You can get in touch with Tom by emailing t.westerholm@newsweek.com. Languages: English.
Life & Trends Reporter
A mortgage expert has warned homeowners not to throw away their 1098 tax forms before they file.
In her recent video, California-based realtor Liz Reese (@loanladyliz) explained that 1098 forms can be an important deduction for people who qualify.
"When you open up your mortgage statement this month, do not throw this form away," Reese said in her TikTok, which has received more than 500,000 views.
Reese explained that for homeowners, the 1098 form shows how much interest you paid on your mortgage last year, which can be important.
"Whether you do your taxes or you take it to an accountant, they're going to want to see this so that they can write off the interest possibly," Reese said.
Newsweek reached out to Reese by phone on Tuesday, Feb. 4 requesting further comment.
1098 Forms
A 1098 form is a tax document that reports certain types of payments you made during the year, which might help you claim deductions or credits on your tax return.
The most common type is Form 1098 (Mortgage Interest Statement), which shows how much mortgage interest you paid to a lender.
Other variations include Form 1098-T, which reports tuition payments for education tax credits, and Form 1098-E, which shows interest paid on student loans.
If you receive a 1098 form, it means the IRS has been notified about the payments, and you may be eligible for a tax break.
Other Tips
Here are some more tax tips for homeowners:
- Property Tax Deduction: You can deduct up to $10,000 ($5,000 if married but filing separately) in state and local taxes, which includes property taxes. Be sure to keep track of what you've paid throughout the year.
- Energy Efficiency Credits: If you've made energy-efficient upgrades to your home, such as installing solar panels, energy-efficient windows or insulation, you may qualify for federal tax credits. Check IRS guidelines for eligible improvements.
- Home Office Deduction: If you work from home and have a dedicated workspace, you may qualify for a home office deduction. This applies to self-employed people as well, allowing them to deduct a portion of rent, utilities, and internet expenses.
- Capital Gains Exclusion: When selling your home, you may be able to exclude up to $250,000 ($500,000 for married couples) of capital gains from your taxable income if you've lived in the home for at least two of the past five years.
- Private Mortgage Insurance (PMI) Deduction: If you pay PMI on your mortgage, you may be eligible to deduct the cost, depending on your income level.
Before filing, consult with a tax professional to ensure you're maximizing your deductions and staying compliant with current tax laws.
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