How to File 1098: A Payer-First Guide

November 18, 2025

This 1098 mortgage interest payer guide will help you understand how to file 1098 forms without a hassle.

What You Need to Know About Form 1098

Form 1098, also referred to as ‘Mortgage Interest Statement,’ is used to report mortgage interest (including points) of $600 or more received from an individual in the course of trade or business. It includes sole proprietors, too. Here, reimbursements of overpaid mortgage interest apply as well.

Confused about mortgages? According to the IRS, it’s “any obligation secured by real property” which includes land and almost anything built on it, growing on it, or attached to it.

There are three primary qualifying factors to determine if a mortgage is applicable for a tax year:

Total interest or points paid is $600 or greater.
Mortgage is held by an individual or a sole proprietorship.
Mortgage is secured by real property (land and property or structures that are integrated/affixed to it).

If you are looking for a Form 1098 filing platform, Tax1099 makes it easy, smart, and secure!

Who Should File Form 1098?

Here’s the thing. If you’re a business or organization receiving money or property, you’re the filer. And you must tell the IRS about it. So, what are the typical filers?

Loan servicers and lenders receiving mortgage or student-loan interest.
Schools and colleges receiving tuition or grant payments.
Charitable organizations receiving donated cars, boats, or planes worth more than $500.

Remember this rule: If you give Copy B to the borrower, student, or donor and file the form with the IRS, you are the payer for Form 1098 purposes.

The Four 1098 Forms

There are four types of 1098 forms and each one has its own purpose and requirements. Let’s break them down for you.

Form	When the Payer Files	Dollar Trigger	Who Gets Copy B
1098 (Mortgage Interest)	Mortgage interest received	$600 or more	Borrower
1098-E (Student-Loan Interest)	Student-loan interest received	$600 or more	Student
1098-T (Tuition Statement)	Tuition or grants received	Any amount	Student
1098-C (Vehicle Donation)	Qualified vehicle received	Over $500	Donor

Form 1098 Deadlines to Watch Out

Missing deadlines is expensive. Really expensive! Know these form 1098 deadlines 2025 at any cost to dodge penalties.

January 31: Send Copy B to the borrowers (Form 1098), students (Forms 1098-E and 1098-T).
For Form 1098-C, furnish Copy B within 30 days of the donation or the sale of the vehicle, whichever applies.
February 28: Mail those paper returns to the IRS. Don’t forget that this is only allowed if you file fewer than 10 information returns in total.
March 31: This is your e-filing deadline with the IRS.

Tip: E-filing is always faster and more reliable than paper filing. Also, calendar reminders before each deadline will save you from scrambling later.

Form 1098 Filing Prep List

A payer Form 1098 checklist is like a survival guide that makes compliance much easier. Go through this carefully and you should be good.

Collect all details like W-9 forms (or W-9S), school data, or donation letters.
Verify those TINs. Use the IRS TIN Matching service to flag mismatches and avoid IRS notices.
Do the math. All up all interest received, tuition paid, or the vehicle’s fair-market value (FMV). Double-check everything.
Check the 10-Return Rule. Do you have 10 or more information returns? Then you must e-file unless you obtain an approved waiver.
Set reminders. We can’t stress this enough! January 31 for recipient copies and March 31 for IRS e-filing.
Finally, store all your records for at least four years. Keep forms, receipts, and IRS “Accepted” messages.

Filling in the Boxes: What Goes Where

Okay, so you have the form and you’re ready to fill it out. But all those boxes look confusing and scary! Who do you do? Take a deep breath and follow this table.

Form	Key Boxes	What the Payer Enters	Tip
1098	Box 1	Mortgage interest	Leave out escrow, points, PMI
1098	Box 2	Principal on Jan 1	Information only, no math
1098-E	Box 1	Student-loan interest	Include capitalized interest
1098-T	Box 1	Tuition paid	“Billed” is no longer used
1098-T	Box 5	Grants & scholarships	Lowers the student’s credit
1098-C	Box 1	Vehicle FMV	Use a pricing guide or appraisal
1098-C	Box 5	Sold vs kept	Tick “sold” if charity sold the car

Step-by-Step Guide to File Form 1098

All set to file? This is how you do it.

Gather all data like names, addresses, TINs, and the dollar amounts (total interest received, tuition paid, or vehicle value).
Upload to Tax1099. You can import data from Excel or CSV files or connect directly to your accounting system.
Run automated checks. Tax1099 flags problematic TINs or addresses before you submit anything.
Go through each flagged item and correct them. Keep editing until every line item is green.
E-File by clicking submit and you’ll get an “Accepted” confirmation from the IRS within minutes.
Send copies to the recipients. You can email if you have their consent or use Tax1099’s print-mail service to send physical copies by January 31.
Archive everything. When we say everything, we mean it. Tax1099 stores records stay for four years.

5 Most Common Mistakes and How to Fix Them

Aren’t mistakes part and parcel of life? Instead of beating yourself up when you make them, learn from these frequent filing errors.

Mistake	Why It Happens	Why It Matters	Fix in Tax1099
Points shown as interest	Prepaid interest (“points”) from closing gets added into Box 1 totals.	Overstates interest, confuses borrowers, and triggers IRS mismatch alerts.	Remove points from Box 1, select “Corrected,” and re-submit a Corrected 1098.
Wrong TIN	Typos or outdated SSN/EIN on payer records.	IRS rejects the return, issues a B-Notice, and penalties can apply.	Run a TIN Match, correct the number, and re-file in seconds.
Missing January 31 Copy B deadline	Calendar mix-ups or late data pulls.	$130 per form penalty if copies are >30 days late.	Send copies immediately via Tax1099’s print-mail service.
Guessing vehicle value (FMV)	No standard guide on hand leads to rough estimates.	Over or under-reporting FMV draws IRS questions and donor disputes.	Look up FMV with Tax1099’s valuation tool and file a Corrected 1098-C.
Paper filing with ≥ 10 returns	Overlooking the e-file mandate threshold.	Automatic penalties if you paper-file when e-filing is required.	Switch to e-filing in Tax1099 with no extra cost and avoid a penalty.

Real-Life Examples

1. A lender received $3,200 in mortgage interest from a borrower.

Payer action: File 1098.

2. A loan servicer collected $850 in student loan interest from a borrower.

Payer action: File 1098-E.

3. A college recorded $6,000 in tuition payments from a student.

Payer action: File 1098-T.

4. A charity received a car worth $4,800 FMV.

Payer action: File 1098-C.

5. A lender received $450 interest from a borrower

Payer action: No form (below $600).

FAQs

1. Can a payer still file on paper?

Yes, but only if you’re filing fewer than 10 total information returns for the year.

2. Who usually files when a loan is sold mid-year?

Each servicer reports the months they actually serviced the loan. So, make sure the form clearly shows the time period.

3. Is email acceptable for Copy B?

Yes, but you must get the recipient’s consent first.

4. How long should we keep records?

Store them for at least four years from the filing date in case of IRS audits.

5. What are the penalties for filing late?

The penalties depend on how late you are. Form 1098 late penalty begins at $60 per form if you’re submitting within 30 days, $130 per form if submitted late. That jumps to $330 per form after August 1 and $680 for intentional disregard.

Filing Form 1098 doesn’t have to be dreadful.
With Tax1099 you can meet every deadline and ace compliance!

Start e-filing now

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