The 1098 reports mortgage interest and property taxes you paid during the year

A Form 1098 is a statement your mortgage lender sends you each January showing how much mortgage interest and property taxes you paid in the previous year. Your lender is required by the IRS to send this form to you and file a copy with the government. The form exists so you can claim deductions on your tax return if you itemize rather than take the standard deduction.

You will receive a 1098 only if you have a mortgage loan secured by your home — a primary residence, second home, or investment property. If you own your home outright or are still saving to buy, you will not receive one. The form shows what you actually paid, not what you owed, so if you made extra payments or paid off your loan early, those amounts appear on the form you receive that year.

The 1098 is one of several tax forms lenders and financial institutions send. It is different from a 1099 form, which reports other types of income or payments. Understanding what lines on the 1098 mean and whether you need it for your return depends on your filing situation and whether itemizing makes sense for you.

Key Takeaways

  • Form 1098 reports mortgage interest paid and property taxes withheld, which you can deduct only if you itemize deductions on Schedule A rather than taking the standard deduction.
  • Your lender must send you the 1098 by January 31 if you paid at least $600 in mortgage interest during the year, though some lenders send it for smaller amounts.
  • The form shows what you actually paid in a calendar year, so refinancing, extra payments, or paying off your loan early all change the amounts that appear.
  • You do not need to attach the 1098 to your return, but you do need to report the numbers from it on Schedule A if you itemize.

What each line on the 1098 means

The 1098 has several numbered boxes, and each one reports a different type of payment. Box 1 shows the mortgage interest you paid during the year. This is the amount you can deduct if you itemize. Box 2 shows any points you paid on the loan — these are upfront fees that lower your interest rate, and they may be deductible in the year you paid them or spread over the life of the loan depending on the type of loan.

Box 3 reports the amount of mortgage insurance premiums your lender withheld from your payments and paid on your behalf. Mortgage insurance premiums can be deductible under certain income limits, though this deduction has expired and been reinstated several times. Box 4 shows property taxes your lender paid from an escrow account — money you gave your lender to hold and pay to the local tax assessor on your behalf.

Box 5 reports the outstanding principal balance on your loan as of January 1 of the year the form covers. This is informational and does not directly affect your deduction, but it helps you verify the lender has the right loan. Box 6 shows the loan origination date. Boxes 7 through 11 contain other information such as whether the loan is a home equity line of credit or whether you are a U.S. citizen.

When you need the 1098 to file your return

You need the 1098 only if you plan to itemize deductions on Schedule A of your tax return. Most people take the standard deduction instead, which means they do not itemize and do not report mortgage interest or property taxes line by line. For the 2024 tax year, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. If your total itemized deductions — mortgage interest, property taxes, charitable donations, and state and local taxes combined — exceed the standard deduction, itemizing saves you money.

If you do itemize, you report the mortgage interest from Box 1 on Schedule A, Line 8. You report property taxes from Box 4 on Schedule A, Line 5, though there is a limit: you can deduct no more than $10,000 in state and local taxes combined per year, regardless of how much you paid. This limit includes property taxes, state income taxes, and sales taxes combined.

If you did not itemize in previous years but your deductions are close to the standard deduction, receiving a 1098 might push you over the threshold. Use a tax worksheet or speak with a tax professional to compare your two options before filing.

Why your 1098 might show different amounts than you expected

Many people assume the 1098 will match their mortgage statement, but the two often differ. Your mortgage statement shows what you paid that month, while the 1098 shows what your lender actually received and credited to interest for the full year. If you made a payment late, paid extra, or refinanced during the year, the timing affects which year's 1098 the payment appears on.

If you refinanced your mortgage, you will receive two 1098 forms — one from your original lender for the months you had that loan, and one from your new lender for the months after refinancing. The interest you paid to close out the old loan and points you paid to start the new loan both appear on the forms you receive, but in different boxes and from different lenders.

If you paid off your loan early or made a large lump-sum payment, the 1098 reflects only the interest portion of your payments, not the principal. The form also does not include interest you paid before closing on the loan — that appears on a different form called a Closing Disclosure, which you received at closing and can deduct separately if you itemize.

Errors on your 1098 and how to correct them

If the 1098 your lender sends you contains an error — a wrong loan number, incorrect interest amount, or your name misspelled — contact your lender's customer service department and ask them to issue a corrected form. The IRS requires lenders to send corrected 1098s by March 31 if the error is caught before then. If you discover the error after filing your return, you can file an amended return using Form 1040-X and attach the corrected 1098.

If you never receive a 1098 by early February, contact your lender to request one. Some lenders allow you to read it from your online account. If your lender says they did not send one because you paid less than $600 in interest that year, you can still deduct the interest you paid — you just will not have the form as documentation. Keep your mortgage statements and payment records in case the IRS asks to verify the amount.

How the 1098 connects to other tax forms and deductions

The 1098 works alongside other forms and deductions on your return. If you have a home equity line of credit or home equity loan, your lender may send a separate 1098-H form reporting interest on that loan. Interest on home equity debt is deductible only if you used the loan to buy, build, or improve your home — not if you used it for other purposes like paying off credit cards.

Property taxes reported on your 1098 count toward the $10,000 annual limit on state and local taxes. If you also pay state income tax or sales tax, those amounts reduce how much property tax you can deduct. Some people in high-tax states hit this limit and cannot deduct all their property taxes, which is why itemizing does not always save money even with a mortgage.

If you are self-employed and own a rental property, you will receive a 1098 for that property, but you report rental income and expenses differently — on Schedule E rather than Schedule A. The mortgage interest on a rental property is a business expense, not a personal deduction, and is not subject to the $10,000 state and local tax limit.

Frequently Asked Questions

Do I have to attach my 1098 to my tax return?

No. You report the numbers from your 1098 on Schedule A if you itemize, but you do not physically attach the form to your return. The IRS already has a copy because your lender filed one. Keep your 1098 with your tax records in case you are audited and the IRS asks to verify the amounts.

What if I paid mortgage interest but did not receive a 1098?

If you paid at least $600 in mortgage interest, your lender is required to send you a 1098 by January 31. Contact them to request one. If you paid less than $600, the lender may not be required to send a form, but you can still deduct the interest — keep your mortgage statements as proof.

Can I deduct mortgage interest if I take the standard deduction?

No. Mortgage interest is an itemized deduction, which means you can claim it only if you itemize on Schedule A. If you take the standard deduction, you cannot also deduct mortgage interest. You must choose one method or the other.

Does the 1098 show what I owe on my mortgage?

No. Box 5 shows the outstanding principal balance as of January 1, which is informational only. The 1098 reports what you paid in interest and property taxes during the year, not what you still owe. Your mortgage statement shows your current balance.

If I refinanced, will I get two 1098 forms?

Yes. Your original lender sends a 1098 for the months you had that loan, and your new lender sends a 1098 for the months after refinancing. Both forms are correct — report the interest from each one on your return for the year you received the forms.