How do I add Mortgage Interest and Points Not Reported on a 1098?

When mortgage interest or points are not reported on Form 1098, you can still claim them on your tax return if they meet IRS deductibility requirements. The key is to report them on Schedule A (Form 1040), line 8b for mortgage interest and line 8c for points not shown on Form 1098.

Reporting Mortgage Interest Not on Form 1098

• Enter the amount of mortgage interest you paid directly to a person (such as a seller) who is not a financial institution on Schedule A (Form 1040), line 8b.
• Include the seller’s name, address, and taxpayer identification number (TIN) on the dotted lines next to line 8b.
• Attach a statement explaining the difference between what was reported on Form 1098 and what you actually paid. Print “See attached” next to line 8b.
• Failure to provide the seller’s TIN may result in a $50 penalty per failure.

Reporting Points Not on Form 1098

• If you paid points that were not reported on Form 1098, deduct them on Schedule A (Form 1040), line 8c.
• Points are deductible only if they were paid for the purchase of your principal residence and meet IRS criteria (e.g., clearly designated as points on the settlement statement, computed as a percentage of loan amount, charged under local business practice).
• Seller-paid points are also deductible if they were paid on your behalf and meet the criteria for reportable points.

Important Notes

• Only interest and points paid for the purchase, building, or substantial improvement of a qualified home are deductible.
• Interest from home equity loans or lines of credit is not deductible unless proceeds were used for home acquisition or improvement.
• Points paid for refinancing or non-principal residences are not deductible.

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Disclaimer: Always verify details with current Federal or State Department of Revenue Forms and Instructions. For complex situations, consult a CPA or tax attorney.