How to Handle Conflicting 1098 Mortgage Interest Statements for Tax Filing

This is actually quite common when mortgages get transferred between servicers. The good news is that handling multiple 1098 forms for the same mortgage isn't complicated. You should report the total interest from BOTH forms when filing your taxes. Each 1098 represents the interest you paid to each respective servicer during the time they held your loan. First Mortgage Corp is reporting the interest you paid during those first few weeks, and Home Loan Services is reporting what you paid after the transfer. Together, they represent your total mortgage interest for the year. When you're entering this in your tax software, there should be an option to enter multiple 1098 forms. If you're using a tax preparer, just provide them with both forms. The IRS gets copies of both forms as well, so they'll be expecting to see the total amount reflected on your return.

I went through this exact nightmare last year with my mortgage being sold twice! I was ready to pull my hair out trying to make sense of the different 1098 forms until I found taxr.ai (https://taxr.ai). Their document analyzer tool was a lifesaver - I just uploaded all my 1098 forms and my mortgage statements, and it showed me exactly what was going on with the numbers. The tool highlighted where there was some overlap in the reporting periods between the servicers and calculated what my actual total interest paid was for the year. It even created a simple explanation document I could attach to my return. Seriously saved me hours of stress trying to reconcile everything manually!

I was skeptical about using yet another tax tool, but after dealing with my mortgage servicer nightmare (4 different companies in one year!), I finally tried taxr.ai last month. It took me maybe 10 minutes to upload all my documents and I instantly understood what was happening with my multiple 1098 forms. Turns out two of my servicers were claiming the same March payment in their calculations, which explained why my numbers weren't adding up. The report made it super clear what I needed to enter on my tax return and why. I was able to file with confidence rather than just guessing and hoping I didn't mess up. For anyone dealing with multiple 1098s, it's definitely worth checking out.

For anyone struggling to get answers about their mortgage interest reporting issues, I spent TWO WEEKS trying to get through to someone at my mortgage company who could explain the discrepancies in my 1098 forms. Kept getting bounced between departments, put on endless holds, or told "someone will call you back" (they never did). Finally found https://claimyr.com and watched their demo (https://youtu.be/_kiP6q8DX5c) - they got me connected to an actual human at the IRS who answered all my questions about handling multiple 1098 forms in about 20 minutes. Turns out the IRS has specific protocols for these situations that none of my mortgage servicers bothered to explain correctly. Having an actual IRS agent walk me through exactly how to report everything properly gave me so much peace of mind. No more getting different answers from every customer service rep I talked to.

I was super skeptical about Claimyr when I first heard about it (sorry for calling it a potential scam). After another failed attempt to reach the IRS myself about my mortgage interest issue (got disconnected after waiting on hold for 1.5 hours), I figured I had nothing to lose and tried it. Honestly, I'm still shocked at how well it worked. I put in my number around 9am, went about my day, and got a call around 2pm saying they had an IRS agent on the line. The agent confirmed exactly what I needed to do with my multiple 1098 forms and explained that I should keep records of how I calculated the total interest amount in case of questions later. Literally saved me days of frustration and I finally got a definitive answer directly from the IRS.

One thing nobody mentioned yet - check if the loan numbers on both 1098 forms are the same. When my mortgage was sold, they assigned a new loan number, which caused some confusion when I was trying to reconcile the forms. Also, don't forget to check if points paid at closing are included on one of the forms - those are deductible too and sometimes get reported separately!

Has anyone had issues with property taxes being reported incorrectly on these 1098 forms after a loan transfer? My new servicer didn't report any of the property taxes paid through escrow, but the old one did. Trying to figure out if I need to get a corrected form.

This is exactly the situation I found myself in last year! The stress of trying to figure out which numbers to use was keeping me up at night. What really helped me was creating a simple spreadsheet where I listed every mortgage payment I made throughout the year with the dates and amounts, then compared that to what each 1098 form was reporting. I discovered that my original lender was including some fees in their interest calculation that weren't actually deductible interest, while my new servicer had the cleaner numbers. The key is to focus on what you actually paid in mortgage interest, not necessarily what the forms say if there are discrepancies. Also, don't stress too much about triggering an audit - mortgage interest reporting issues are super common and the IRS sees this all the time. As long as you're being honest about what you actually paid and can document it, you'll be fine. Keep copies of all your payment records and mortgage statements just in case you need them later!