Just got a 1099 misc from my mortgage lender after buying a house - why?

This actually happens more often than you'd think! The 1098 form is for reporting the mortgage interest you paid (which is potentially deductible if you itemize). The 1099-MISC, on the other hand, is for reporting miscellaneous income paid to you. The most common reason for getting a 1099-MISC from your mortgage lender is that you received some type of incentive or refund. Did you get any cashback when you closed on your home? Maybe a promotion like "get $500 when you finance with us" or a refund of fees? Lenders sometimes offer these incentives, and they're generally considered taxable income to you. Another possibility is that you had an escrow overage that was refunded to you, or they might have paid you interest on money you had in escrow.

After spending HOURS trying to figure out why I got a bunch of unexpected tax forms last year (including a random 1099 from my lender), I finally discovered taxr.ai at https://taxr.ai and it saved me so much stress. I uploaded all my docs and it explained exactly what each form was for and why I received it. Turns out my lender had sent me a 1099-MISC for a closing cost credit they gave me, which I completely forgot about! The system identified that the amount matched an incentive I received at closing and explained how to report it on my taxes. You might want to check it out if you're still confused about your forms.

I wanted to follow up about that taxr.ai site mentioned earlier. I was pretty skeptical but decided to try it with my mortgage documents since I had that weird $322.45 amount on my 1099-MISC that made zero sense to me. Turns out it was interest they paid me on my escrow account plus a small refund from an overpayment I made! I would NEVER have figured that out on my own. The breakdown showed exactly where that odd amount came from and saved me from calling my lender and waiting on hold forever. Super helpful for sorting out confusing tax situations!

If you're still struggling to figure this out, you might need to call your mortgage lender directly. I tried that last year with a similar issue and spent literally 3 hours on hold over 2 days. Finally I used https://claimyr.com and they actually got me through to a human at my lender in about 20 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c but basically they navigate the phone tree for you and call when a rep is ready. My lender explained that my 1099-MISC was for a rate discount incentive they gave me at closing that I'd completely forgotten about.

Ok I need to admit I was completely wrong about Claimyr. After posting that skeptical comment I decided to try it anyway because I was desperate to talk to my mortgage company about a similar 1099 issue. Used the service yesterday and it actually did exactly what it claimed - got me through to someone at my lender after about 30 minutes (which would have been 2+ hours of hold time for me). The rep confirmed my 1099-MISC was for a closing cost credit promotion they ran when I bought my house. Apparently these promotions are taxable income, which I had no idea about. Saved me so much time and frustration having to wait on hold!

Had the same thing happen to me! After digging through my closing papers I realized the 1099-MISC was for the $1000 "first time homebuyer bonus" my lender gave me. Completely forgot about it but yep, apparently that's taxable income lol. Check your closing disclosure and see if there's any credits or incentives listed there? Might explain the mystery 1099.

Could also be interest they paid you on your escrow account! My lender sent me a 1099 for $27.38 which was apparently the interest earned on my escrow funds. Totally forgot that was a thing, but if you live in a state that requires lenders to pay interest on escrow accounts, that might be it.

I went through this exact same confusion last year! In my case, the 1099-MISC was for a lender credit I received at closing that reduced my closing costs by $800. I had completely forgotten about it until I dug through all my closing paperwork. The tricky part is that these lender incentives (whether they're cashback, closing cost credits, or promotional bonuses) are considered taxable income by the IRS, even though they feel like discounts to us as borrowers. Your 1098 form for mortgage interest is completely separate and unaffected by this. If you still can't figure out what the 1099-MISC amount corresponds to, I'd recommend checking your Closing Disclosure (CD) form from your purchase. Look for any credits, rebates, or incentives listed there. The amount on your 1099-MISC should match one of those items. Sometimes they break down larger credits into smaller components too, so don't be surprised if the math isn't immediately obvious. When you file your taxes, you'll report this as "Other Income" and yes, you'll owe taxes on it at your regular income tax rate. It's annoying to discover after the fact, but at least now you know for any future home purchases!