Yes, it's the start of a time of year many American Taxpayers loath... Tax Time! In addition to spending countless hours of time preparing your taxes, The IRS has implemented a completely new 1098 Mortgage Interest Statement. Here's a brief overview of what has changed.
1098 Form Changes
Beginning around January 31, 2017, mortgage companies and mortgage loan Servicers will begin sending out taxpayer 1098, displaying the amount of mortgage interest paid, among several new added fields. See table above for a summary of what is being added.
Below is what the new 2016 Form 1098 Will look like:
Current & Past Sierra Pacific Mortgage Clients
Our customers may receive one or two 1098 forms depending on the servicing/transfer status. Warehouse Loans and Service Retained loans that funded in 2016 will receive only one 1098.
Loans that were Service Released in 2016 will receive two 1098s: one that will include all of the closing detail and transactions made to Sierra Pacific Mortgage Company, Inc. prior to service release, and one from the new servicer for post-release transactions.
1098s will be mailed out by January 31, 2017. All correction requests or disputes should be directed to the Sierra Pacific Mortgage Servicing Department at 888-560-2260.
Instructions for Payer/Borrower
A person (including a financial institution, a governmental unit, and a cooperative housing corporation) who is engaged in a trade or business and, in the course of such trade or business, received from you at least $600 of mortgage interest (including certain points) on any one mortgage in the calendar year must furnish this statement to you.
If you received this statement as the payer of record on a mortgage on which there are other borrowers, furnish each of the other borrowers with information about the proper distribution of amounts reported on this form. Each borrower is entitled to deduct only the amount he or she paid and points paid by the seller that represent his or her share of the amount allowable as a deduction. Each borrower may have to include in income a share of any amount reported in box 3.
If your mortgage payments were subsidized by a government agency, you may not be able to deduct the amount of the subsidy. See the instructions for Form 1040, Schedule A, C, or E for how to report the mortgage interest. Also, for more information, see Pub. 936 and Pub. 535. Payer's/Borrower's taxpayer identification number. For your protection, this form may show only the last four digits of your SSN, ITIN, ATIN, or EIN. However, the issuer has reported your complete identification number to the IRS. Account number. May show an account or other unique number the lender has assigned to distinguish your account.
Box 1. Shows the mortgage interest received by the recipient/lender during the year. This amount includes interest on any obligation secured by real property, including a home equity, line of credit, or credit card loan. This amount does not include points, government subsidy payments, or seller payments on a “buydown” mortgage. Such amounts are deductible by you only in certain circumstances. Caution: If you prepaid interest in 2016 that accrued in full by January 15, 2017, this prepaid interest may be included in box 1. However, you cannot deduct the prepaid amount in 2016 even though it may be included in box 1. If you hold a mortgage credit certificate and can claim the mortgage interest credit, see Form 8396. If the interest was paid on a mortgage, home equity, line of credit, or credit card loan secured by your personal residence, you may be subject to a deduction limitation.
Box 2. Shows the outstanding mortgage principal on the mortgage as of January 1, 2016.
Box 3. Shows the date of the mortgage origination.
Box 4. Do not deduct this amount. It is a refund (or credit) for overpayment(s) of interest you made in a prior year or years. If you itemized deductions in the year(s) you paid the interest, you may have to include part or all of the box 4 amount on the “Other income” line of your 2016 Form 1040. No adjustment to your prior year(s) tax return(s) is necessary. For more information, see Pub. 936 and Itemized Deduction Recoveries in Pub. 525.
Box 5. Shows mortgage insurance premiums which may qualify to be treated as deductible mortgage interest. See the Schedule A (Form 1040) instructions and Pub. 936.
Box 6. Not all points are reportable to you. Box 6 shows points you or the seller paid this year for the purchase of your principal residence that are required to be reported to you. Generally, these points are fully deductible in the year paid, but you must subtract seller-paid points from the basis of your residence. Other points not reported in box 6 may also be deductible. See Pub. 936 to figure the amount you can deduct.
Box 7. If the address of the property securing the mortgage is the same as the payer's/borrower's, the box will be checked and boxes 8 and 9 will be blank. If not, either box 8 or 9 will be completed.
Box 8. This is the address of the property securing the mortgage.
Box 9. This is the description of the property securing the mortgage, if box 7 is not checked and box 8 is not completed.
Box 10. The interest recipient may use this box to give you other information, such as real estate taxes or insurance paid from escrow. Future developments.
For the latest information about developments related to Form 1098 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form1098.
For any questions related to or understanding your 1098 form(s), please consult your tax advisor.
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Branch Manager & Residential Mortgage Loan Originator
2580 St. Rose Pkwy., Suite #230
Henderson, NV 89074
Office: (702) 420-2250
Fax: (855) 689-6691
Some products and services may not be available in all states. Programs, rates, terms, and conditions are subject to change without notice. Subject to verification of borrower qualifications, property evaluations and credit approval. Terms and conditions apply. This is not a commitment to lend and not all borrowers will qualify. Sierra Pacific Mortgage Company, Inc. may not be the lender for all products offered. Some loans may be made by a lender with whom Sierra Pacific Mortgage has a business relationship. Sierra Pacific Mortgage Company, Inc. NMLS #1788. Nevada Commissioner of Mortgage License #3268. Additional license info available at: www.nmlsconsumeraccess.org. Equal Housing Lender.