You generally must file Form 1098 when you receive $600 or more in mortgage interest, including reportable points, during the year in the course of your trade or business from an individual, including a sole proprietor. The threshold applies separately to each mortgage. The form reports interest received by the lender or other reporting recipient, not the borrower’s entire mortgage payment.
Key Takeaways
- Form 1098 is a mortgage interest statement, not a general loan-payment report.
- The $600 reporting threshold applies mortgage by mortgage.
- A business can have a filing obligation even if lending is not its main activity.
- Separate interest from principal, escrow, and other payment components.
- Review borrower statements and IRS filing as separate completion steps.
Who Must File Form 1098?
The IRS instructions for Form 1098 describe the reporting obligation for mortgage interest received in a trade or business. Banks and mortgage companies are familiar filers, but the rule is not limited to those businesses.
A business that receives qualifying mortgage interest should review whether it has a reporting obligation even if it is not primarily a lender. The IRS instructions specifically address recipients that are not in the lending business.
Do not decide based solely on whether a loan is called a “business loan” in your bookkeeping system. Review the obligation, the property securing it, who paid the interest, and the capacity in which you received it.
Likewise, do not assume that every privately held note creates the same reporting duty. Have your tax adviser evaluate the arrangement against the actual Form 1098 rules.
Apply the $600 Threshold to Each Mortgage
The threshold is not a single total for every loan connected with one borrower. The IRS requires a separate Form 1098 for each mortgage that meets the reporting requirements.
For example, suppose an individual pays your business $450 of qualifying interest on one mortgage and $450 on another during the year. The combined amount is $900, but neither mortgage reaches the $600 threshold on its own.
That example addresses only the threshold. It does not replace a review of the other reporting requirements. Keep a mortgage-level ledger so your team can support the filing decision for each obligation.
If you choose to report interest below the required threshold, the IRS instructions still apply to the form you file. Do not treat a voluntary return as an informal statement with different accuracy standards.
Separate Mortgage Interest From the Total Payment
A monthly payment can include principal, interest, escrow deposits, and other charges. Reporting the full amount as mortgage interest would overstate the figure.
Reconcile the annual interest total to the servicing ledger or other reliable loan records. Identify adjustments and confirm how they affect the reportable amount before importing the final data.
Points require their own review. Not every fee described as a point or origination charge is reportable in the same way. Follow the IRS instructions for the transaction rather than adding all closing costs to interest.
Also flag refunds of overpaid interest. These require attention to the applicable reporting instructions and should not disappear into a general cash adjustment account.
Check the Borrower and Property Information
An accurate dollar total is only part of a usable return. Review the payer or borrower name, address, taxpayer identification information, account reference, and applicable property details.
For multiple borrowers, follow the IRS payer-of-record rules instead of automatically splitting the amount equally. Keep supporting records that explain which person is shown on the statement.
Compare the prepared form with the underlying mortgage record, not merely last year’s return. A transferred loan, changed address, or corrected taxpayer record can make a prior-year copy an unreliable starting point.
Assign exceptions to a reviewer. If the ledger and the loan documentation disagree, settle the difference before the return enters the final filing batch.
Put the 2026 Form 1098 Deadlines on Your Calendar
For tax year 2026, the general deadlines are February 1, 2027, to furnish the borrower statement, March 1, 2027, for paper IRS filing, and March 31, 2027, for electronic IRS filing. The first two dates reflect the weekend adjustment to the usual January 31 and February 28 dates.
These dates follow the reporting calendar and weekend rule in IRS Publication 1099 for 2026. Paper filing is available only when your filing circumstances permit it; do not treat its deadline as an election to bypass an electronic filing requirement.
Plan separate checkpoints for the borrower statement and IRS submission. Finishing one does not finish the other.
Prepare the Forms From Reviewed Records
1099Express supports the 1099 and 1098 series, including importing recipient information from Excel spreadsheets. Begin with reconciled mortgage records and keep a final review step before submission.
If you need help selecting a product or understanding the preparation workflow, visit 1099Express products, email support@1099express.com, or call (361) 884-1500.
People Also Asked
Q: Does the $600 threshold apply to all mortgages for one borrower combined?
No. The IRS applies the threshold separately to each mortgage.
Q: Should Form 1098 include principal payments?
No. Principal is not mortgage interest, so reconcile payment components before preparing the statement.
Q: Can a business that is not a bank need to file Form 1098?
Yes. Receiving qualifying mortgage interest in a trade or business can create a reporting obligation even when lending is not the business’s primary activity.