Hey There, 2016 1098. You look Different!

As the years go by, things change.  And with change comes new learning experiences and getting used to new things.  The 2016 1098 is basically the same form, with just a few key changes to take note;

  • Box 2 Outstanding mortgage principal as of 1/1/2016 – please report the outstanding  mortgage principal on the 1098.
  • Box 7 Is address of property securing mortgage same as Payer’s/Borrower’s address? – this is a checkbox.  Check the box if the answer is Y and skip box 8. If the answer is no, then leave the box unchecked and fill in box 8.
  • Box 8 Address of property securing mortgage – Only fill this in if the check box in box 7 is left blank.

Something else that is very important to note about Form 1098 is Box 4 Refund of overpaid interest.  Many banks (Lender’s) feel this should be a negative number because it is something that is being refunded to the Borrower.  However,  the IRS will not except the number as a negative and must be sent as a positive number.  In all of my years working at E-File Magic this is the number one error I see with form 1098.

Please remember we are here to help! Please call or email us if you have any questions!

 

2016 Tax Year Deadlines

NEW IRS Deadlines:
Please note the IRS now has two e-Filing deadlines associated with 1099-MISC records.

  • 1099-MISC records with an amount in box 7 – e-Filing deadline is now January 31st, 2017.
  • 1099-MISC records without an amount in box 7 e –Filing deadline is March 31st, 2017.

E-File Magic Processing Deadlines:
To ensure compliance with IRS deadlines please “Release” your data by the following times and dates based on the services you are requesting.

  • Print, mail, and e-File services deadline – Release your data by 1:00pm PT, January 27th, 2017.
  • e-Filing services only deadline – Release your data by 8:00pm PT, January 31st, 2017.

The above E-File Magic  deadlines are to ensure compliance with IRS deadlines. As always, E-File Magic will continue to print, mail, and e-File as data is received after our deadline dates throughout the year.

Combined Federal/State Filing Program… What is it?

One of the top questions we get at E-File Magic is, “Do you file our forms to the state as well as to the IRS?”

Well, the answer is yes and no.  The IRS offers a combined filing program with some states in which they will forward the information we submit to the state.  But not all states participate in this service.  Below, you will see a list of states that participate in the combined filing program.  If the state you are looking forward is not listed, please refer to that particular state’s 1099 filing instructions.

  • Alabama
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Georgia
  • Hawaii
  • Idaho
  • Indiana
  • Kansas
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Jersey
  • New Mexico
  • North Carolina
  • North Dakota
  • Ohio
  • South Carolina
  • Vermont
  • Virginia
  • Wisconsin

2015 Instructions for Form 1098

Form 1098 is not a tricky form…. Form 1098 Mortgage Interest Statement is simply that, it’s the statement that reports the amount of interest paid, points paid on purchase of principal residence, and refund of overpaid interest (which must be a positive number).

In my experience, the trickiest part of the 1098 is where to enter in the negative interest amount, or the refunded interest amount.  This goes in Box 3 as a positive number.

If you would like some light reading for this 4th of July weekend, you can look over the instructions on Form 1098. i1098

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