We’ve previously talked about Form 1098, the different types, and FAQs to help you with your filing every year. But this time, we wanted to focus on some common 1098 filing mistakes and how to avoid (or fix) them before they become a bigger or recurring problem. Need help with your 1098 filing? Contact the experts at eFile360 today! Common 1098 Filing Mistakes: Uncertainty about Reportable Points There are several confusing concepts within the 1098 filing process, as with many information returns. And one of those concepts is the who, how, and exceptions that surround reportable points for mortgage interest. A qualified person or lender of record must file Form 1098 to report all points paid in connection with the purchase of a principal residence, according to the IRS. This applies to anyone in business to collect these interest payments if the total reaches or exceeds $600 in points or other mortgage interest. Individuals and private owners who are paid for a mortgage will not need to worry about Form 1098. Several conditions must be met to create a scenario for reportable points, as well as several exceptions, all of which are outlined at this IRS link. Failing to File for an Extension If there are errors on the 1098s you send out or receive, they may result in a taxpayer’s need to file an extension. If information forms have incorrect information or errors in the calculations or other reportable amounts, it’s important to get those extension requests in sooner rather than later. It’s always better to have it and not need it than to need it and not have it, as they say. If you can’t make the April 18th deadline for 2023, or if you’re worried you won't have your corrected current tax year information returns in enough time to meet that deadline, you should start the extension process as soon as possible. The penalty for failing to file your tax return on time is 5% of your unpaid taxes for each month you are late, with a possible cumulative …
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