What is the form for?
The purpose of the 1098 Form E is to determine any eligible federal tax deductions for people who have paid interest on student loans. It’s official name is the Student Loan Interest Statement. The form comes from a lender and is sent either electronically or via mail to the borrower.
Who has to fill out the form?
People with student loans do not initiate the creation of the form. Instead, the loan servicers are the ones that send out the form to people who are potentially eligible for a tax dedication on their student loan interest. The form is sent to anyone who pays at least $600 in student loan interest. This means some may receive more than one form depending on any outstanding loans. Once received, the borrower can determine if they are eligible for any deductions and can apply those deductions to their tax form using the 1098 Form E. There are specific qualifications that the person must meet to obtain the deduction. The qualifications are below and come from H&R Block.
- You are required to pay interest on your loans
- You paid the interest
- You are not filing as married filing separately
- You are not dependent on anyone else’s tax returns
- Your income falls below the annual limit
What are the major parts of the form?
On the form received from the loan servicer, the lender’s street address and telephone number should appear in the top left box. Under that are two boxes: one for the recipient’s tax identification number (TIN) and the borrower’s TIN. The bottom left box asks for the borrower’s name, street address, and account number. On the right side of the form are boxes 1 and 2. Box 1 asks for the total student loan interest received by the lender. Box 2 includes a check box to indicate if the total for Box 1 does not include loan fees or interest from loans made before September 1, 2004.
How do you fill out the form?
It is the responsibility of the lender to complete the left portion of the form, including the lender’s contact information, the recipient and borrower TIN, the borrower’s name and address, and the account number. The remaining Box 1 and Box 2 is completed by the borrower. In Box 1, the borrower should write the total student loan interest received by the lender. And Box 2 should be checked if the total in Box 1 does not include anything listed in the description of Box 2. After these steps, the form is ready for filing.
Additional information
You can reference the IRS’s information guide for more detailed information on any of the steps listed above.