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Buying and Selling Homes

Home equity loan and Federal taxes

17 years ago

I'm doing my Federal taxes and am filling out Schedule A. I have the amount of mortgage interest from the Form 1098, and have entered that on line 10 of Schedule A. However, I also have a small home equity loan. I know the amount of interest paid on that from an end-of-year statement, but I don't have a Form 1098 to go with it. Does this amount get added in on Line 10 also, or somewhere else?

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Comments (6)

brickeyee
17 years ago
Same line.
novahomesick
17 years ago
You would add the home equity loan interest to your first mortgage interest and report both on line 10. However, you should really wait for the 1098. It's the definitive document. Statements are arriving daily. Can you call your lender and ask if it's been sent? Some lenders also provide the ability to print the form online from their website.
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jlhug
17 years ago
If you don't get a 1098 for the equity loan, put it on line 11 of your schedule A. Line 10 is for mortgage interest and points reported on a 1098. I have seen a line audit triggered by mortgage interest that wasn't reported on a 1098 but was included on line 10.
novahomesick
17 years ago
Good advice jlhug

Kudzu9...quick question. Did you pay more than $600 in interest on the Home Equity Loan? If so, the lender owes you a 1098. Do you think it just hasn't arrived?

In brief, the IRS likes the documents THEY receive (1098s, 1099s etc) to match what you report and they like you to use the right lines....kind of like your kindergarten teacher.

I work as a volunteer tax preparer for AARP and VITA. We do fairly simple returns (no Schedule C's for us). The first few weeks of February, we get a lot of people who want to file before all their 1099s and 1098s arrive...using year-end statments. We send them home because the IRS gets very snippy with us if we go ahead. We hear back from them every year so we can improve out training. IRS likes the numbers from the mortgage interest 1098s sent to THEM to match what is reported on line 10...much easier to do in the age of electronic filing. We don't want our customers getting intimidating letters asking for an explanation.

So, if you expect to receive a 1098 and you think your lender will send one to the IRS, you may want to give the mailman a few more days or call your lender.

If you do not expect to receive a 1098, use line 11. Sound picky? Yup, but tax people tend to be picky people.

That's my free advice...you get what you pay for.
kudzu9
Original Author
17 years ago
novahomesick-
Thanks. For once, free advice is worth more than I paid for it!

I started the loan in mid-year; it's small and the interest rate is low, so the interest was only a couple of hundred dollars. I will call the bank, though, and see if they intend to send a form. It's the same bank as my mortgage, and they did send the Form 1098 for that.
jenna1
17 years ago
You can also go online to your lender's website. I printed out the 1098's from both our HELOC and mortgage company's website. We also received them in the mail a few weeks later.

I don't know if all lender websites have this but it may be worth the try to register with them and find out.

Hope this helps.

Jenna

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