How to Report Mortgage Interest Income

If you are the lender on a mortgage, you must include the interest paid to you on your income taxes. For example, if you are the seller and you lent the buyer the money to purchase the home, any interest you charge on your loan payments count as taxable income. In addition to knowing the amount of interest you charged, you also need to know the borrower's Social Security number and address. You also have to give the buyer your Social Security number and address for his tax records.

Step 1

Report the payer's name, Social Security number and the amount of interest you earned on line 1 of IRS Schedule B. If you have interest income from multiple mortgages, you must report each one separately. When you have a seller financed mortgage, you must file Schedule B regardless of your total interest income.

Step 2

Total your interest income for the year and report it on line 4 of Schedule B. For example, if you had $6,000 of interest income from the mortgage and $500 in interest on your savings account, report the total on line 4.

Step 3

Complete Part III of Schedule B if your total interest income exceeds $1,500. In Part III, you must tell the IRS whether you had control over any foreign accounts or trusts.

Step 4

Put your total interest income on line 8a of Form 1040 or Form 1040A, whichever one you use to file your tax return. This amount adds to your total taxable income for the year.

Items you will need

  • IRS Schedule B
  • IRS Form 1040 or Form 1040A

Photo Credits

  • Comstock/Comstock/Getty Images

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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