Which document is essential for tax filers claiming mortgage interest?

The 1098 form is crucial for tax filers claiming mortgage interest because it is specifically designed to report the amount of mortgage interest paid to lenders during the year. This form, also known as the Mortgage Interest Statement, provides the taxpayer with the necessary documentation to accurately report interest deductions on their tax returns. When a homeowner pays interest on a mortgage, the lender is required to send this form to the borrower and the IRS, detailing the amount of interest that may be deductible.

This deduction can significantly reduce taxable income, making it a vital component for homeowners. In contrast, the W-2 form is used to report wages and tax information from employers, Schedule C is for reporting income or loss from a business, and the 1040 form is the standard individual income tax return used to report overall income and tax liability but does not specifically provide mortgage interest details. Thus, the 1098 form is the key document required for accurately claiming mortgage interest on a tax return.