How to input interest paid at closing on a primary home purchase with no 1098.

bon26

Bought a primary home in 2025. At closing I pre-paid the interest to the original lender( no points). Lender immediately sold it to a new servicer after closing.

Got my 1098 from the servicer and the interest paid in Box 1 only reflects the interest I paid to them once my mortgage payments started.

Have not received a 1098( yet) from original lender. Should I expect one? And if no 1098 shows up by January 31st, how do I insert the interest paid from closing which is reflected on my closing documents?

JohnV

You can deduct the prepaid interest expense to the original lender if it is related to this tax year. If it is spread over to the next tax year, then you have to deduct the prepaid interest in the next tax year. Here is the IRS instruction from Publication 936:

Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. You can deduct in each year only the interest that qualifies as home mortgage interest for that year.

If your bank hasn't sent a Form 1098 by January 31st, here's how you can enter the mortgage interest:

Choose I have other expenses on the Homeowner Expenses screen.

Answer Yes to the question that asks if you paid mortgage interest on a Form 1098 issued to another
person on the next screen.

Click Add Other Mortgage Interest on the next screen.

Enter your mortgage interest amount paid on the next screen. Then enter "FORM 1098 NOT RECEIVED" for the Name and your own address in the Address section.

This will make sure the amount shows up correctly on Schedule A.