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To calculate interest portion of loan repayments within a specified calendar year in order to produce reports, printed IRS forms, and files to be submitted electronically.
Before using this supplement, determine which loans within the database should receive 1098’s. Option is given to print for all loans, specific funds, specific loan numbers, or by utilizing an optional master file field. Additionally, you will be able to provide forms to only those paying more than $600 interest if you wish. Regardless of how the loans are identified, 1098’s will only be prepared if the specified loan has paid interest within the calendar year selected.
From the GMS-RLSS Main Menu, select Supplements, RLSS 1098’s.
Enter or edit information related to your organization. This feature also allows entry of contact name, phone, and email should you wish to print a 1096 transmittal form.
Prepare 1098 tab
Use the combo box to select the year for which 1098’s are to be printed.
Do you want to print 1098’s for all loans within the database?
If you select “yes” each loan paying interest within the calendar year specified will be included in the calculations. Answering yes will also cause the options below to not be available as it is not necessary to answer them.
If you select “no” you will then be given opportunity to select by specific funding source.
Do you want to print 1098’s for all loan funds?
If you select “yes” each loan paying interest within the calendar year specified will be included in the calculations. Question #3 will then become available.
If you select “no” you will be given opportunity to identify which funding sources to include in the selection. Question 3 will not be available.
Have you established an optional field to determine which loans will have a 1098 printed?
If you select “yes” you will then be given opportunity to identify the correct optional field.
If you select “no” you will be asked to identify which loans are to be included by selecting loan numbers from a combo box. Click on the loan number to be included, and then control/click to select more loan numbers.
If the borrower type is Sole Proprietorship, report using contact name.
By putting a checkmark in this box, any loans that have Borrower Type listed as Sole Proprietorship and have entered the loan with Company Loan Information, the name printed on the 1098 will be the Contact First and Last Name rather than the Company name. If you place a checkmark here, be certain the Fed ID entered is the Contact’s Social Security number.
Only include loans exceeding $600 in interest
By putting a checkmark in this box, only loans that have paid $600 or more of interest during the calendar year selected will be included.
Box 9: Number of properties securing the mortgage.
Select the Optional Field that has been set up to collect this data for each loan having more than one property as security.
This will create the file to be used for the 1098’s and produces a report listing the loans that have been located based on selection criteria, along with the Social Security or federal identification numbers within the Loan Master file for identified loans, and the total interest associated with each loan for the calendar year specified. If Social Security numbers or federal identification numbers are missing in the Loan Master files, a screen prompt will remind you to enter that information before you may continue.
If you have prepared previously for the same calendar year, you will be asked if you wish to overwrite the existing file. If you overwrite, you will lose any edits that have been done using the Edit 1098 button.
This will allow you to make changes on a per loan basis to amounts reported on Form 1098 boxes 1-9 and 11. You must click Edit and then enter your loan number. All Edits will remain unless you return to the Prepare button and re-prepare your file. This will remove all Edits.
If you have entered a Property Address or Property Description in the Loan Master, box 7 will automatically be unchecked and box 8 will be populated with the information from the Loan Master. If you have not entered the Property Address or Property Description in the Loan Master and they are different from the mailing address, uncheck box 7 and enter your information in box 8.
Additionally, you may edit (or enter if you have not set up an Optional Field within the Loan Master) the number of mortgaged properties, if more than one, to be reported in box 9. Should you Prepare 1098s after Editing, you will lose all edits.
Box 11 is to be used to enter the date the mortgage was acquired if you assumed loans from another source.
Prints 1098 forms for identified loans.
Prepares a file that can be submitted electronically to the IRS.
Print 1096 Transmittal
Prepares a 1096 form. This should be included in the email to GMS if GMS is printing your forms.
Things You Should Know
Not all lenders are required to issue 1098 forms. We advise you check with your auditor or attorney to assist with making this decision.
If it is determined that you need to submit 1098’s, and the number of individual forms exceeds 250, IRS requires the data be submitted electronically or magnetically. This requires pre-approval, which can be received by filing form 4419 with the IRS.
IRS may waive the electronic filing requirement for over 250 forms if you can “establish hardship”.
If the form count is less than 250, you have the option of filing on paper forms or electronically.
If filing electronically, a Transmittal Control Code (TCC) must be assigned by IRS. When the pre-approval is accepted, you should receive a letter from IRS stating the approval, and a TCC will be included in the letter.
The agency name, address, phone number, and federal ID number is based on data in Tools/Organization. If you wish to edit, select Setup and edit as desired.
Selecting “Setup” and entering pertinent information is required prior to printing forms or preparing files.
Interest paid is determined by activity dates. If, for example, forms are being printed for 2018, any activity with an activity date falling within calendar year 2018 will be included in the calculations. This will print in box 1.
Box 2 will be automatically populated based upon the loan balance at the start of the selected calendar year.
Box 3 will also be automatically populated based upon the Closing Date entered on the Loan Terms tab of the Loan Master file.
If you wish to report amounts in boxes 4, 5, or 6, this is done manually using the Edit 1098 feature.
Box 7 will be automatically checked. If the address securing the mortgage is different from the Payer’s Address, you will need to select Edit 1098s, remove the checkmark from box 7 and enter the address/location in boxes 8 or 9 as appropriate.
Option to have GMS Print 1098’s for your agency
To use this option, you must give GMS notice of the forms required so we can assure an adequate supply is available in our office when needed. Once every activity has been posted through the end-of-year (December 31st) to your RLSS database will need to be zipped and forwarded to GMS.
For those clients choosing to have GMS print their W2s
If you have requested that GMS print 1098 forms and/or prepare 1098 electronic files, make certain you have reviewed the 1098 form information for accuracy. Once you are satisfied that all information is correct, notify firstname.lastname@example.org that your database is ready to be uploaded. You will then be sent instructions for uploading your zipped database and completed Transmittal form (available below).
GMS RLSS 1098 Transmittal Form
Form printing will generally be done within 1 week of the transmittal form and database arriving at the GMS office. If there are any delays, we will contact you.