A 1098 reports the interest and property taxes you paid during the year

The Form 1098 is a document your mortgage lender sends you each January showing how much mortgage interest and property tax you paid in the previous year. You receive it if you paid at least $600 in mortgage interest during that year. The form has several versions — the most common is the 1098 Mortgage Interest Statement — but they all serve the same purpose: to give you the numbers you need to claim deductions on your tax return.

Your lender is required to send you a 1098 by January 31, and they also file a copy with the IRS. The form shows the account number, the property address, and a breakdown of what you paid toward interest versus principal. It does not tell you whether you should itemize or take the standard deduction — that is your decision based on your full tax picture — but it gives you the raw data to make it.

Key Takeaways

  • You receive a 1098 if you paid at least $600 in mortgage interest during the year, and your lender files a matching copy with the IRS.
  • The form reports mortgage interest paid and property taxes paid, which are the two numbers you use if you itemize deductions.
  • Mortgage interest is deductible on loans up to $750,000 of principal (or $1 million if you took out the loan before December 16, 2017), and property tax deductions are capped at $10,000 per year regardless of how much you paid.
  • If you do not receive a 1098 by early February, contact your lender directly rather than waiting — they can issue a corrected or duplicate copy.
  • The 1098 is informational; the IRS already has a copy, so you do not need to attach it to your return, but you should keep it with your tax records.

What appears on the form and what each box means

A standard 1098 has several numbered boxes. Box 1 shows the mortgage interest you paid during the year. This is the number most people focus on because mortgage interest is deductible if you itemize. Box 2 shows any points you paid on the loan in the current year (points are a form of prepaid interest and can be deductible). Box 5a and 5b show property taxes paid — 5a is usually real estate taxes, and 5b is sometimes used for other taxes, depending on your state and lender.

Boxes 3 and 4 show the loan principal at the start and end of the year. These are informational and do not directly affect your deduction, but they help you track the loan balance over time. Box 6 shows insurance premiums paid through an escrow account (if your lender collects them). Insurance is not deductible, so this box is for your records only. The form also lists the property address and your loan account number so you can match it to your records.

One important detail: the interest shown on your 1098 is not always the same as the interest you actually paid out of pocket. If you paid off the loan early or made extra payments, the 1098 reflects only the interest that accrued through December 31. If you refinanced mid-year, you may receive two 1098s — one from each lender — because each one held the loan for part of the year.

When mortgage interest and property taxes are worth deducting

Deducting mortgage interest and property taxes only makes sense if your total itemized deductions exceed the standard deduction for your filing status. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly (these amounts change each year). If your mortgage interest plus property taxes plus other deductible expenses like charitable donations add up to more than that threshold, itemizing saves you money.

Mortgage interest is deductible on up to $750,000 of loan principal if you took out the loan after December 16, 2017. If your loan predates that, the limit is $1 million. Property tax deductions are capped at $10,000 per year total, regardless of how much you paid — this limit applies to all state and local taxes combined (property, income, and sales taxes), not just property tax alone. If you live in a high-tax state and pay substantial property tax, you may hit that $10,000 cap and not be able to deduct the rest.

Many homeowners find that the standard deduction is larger than their itemized deductions, especially in the first few years of a mortgage when principal paydown is slow and interest is high. Running both scenarios — itemizing versus taking the standard deduction — is the only way to know which saves you more. A tax professional can do this calculation for you, or you can estimate it yourself using a worksheet in the IRS instructions for Schedule A.

What to do if you do not receive a 1098

If your lender does not send you a 1098 by early February, call them directly. Do not wait until tax time. Lenders sometimes delay sending forms, and a quick phone call can get you a duplicate or corrected copy. Have your loan account number ready when you call.

If you paid less than $600 in mortgage interest during the year, your lender is not required to send you a 1098. This often happens in the first year of a loan (if you closed mid-year) or in the final year (if you paid off the loan early). You can still deduct the interest you paid — you just need to calculate it yourself using your loan statements or the amortization schedule from your lender. The IRS has a worksheet in Publication 936 that walks you through this.

If your lender sends you a 1098 but the numbers look wrong — for example, the interest amount is much higher or lower than you expected — ask them to explain the discrepancy before you file. Errors do happen, and lenders can issue corrected forms (called amended 1098s) if needed.

How the 1098 connects to your tax return

You use the numbers from your 1098 to fill out Schedule A (Itemized Deductions) if you choose to itemize. You enter the mortgage interest from Box 1 on line 8 of Schedule A, and the property taxes from Box 5a on line 5a. You then add up all your itemized deductions and compare that total to the standard deduction. Whichever is larger is what you use on your return.

The IRS already has a copy of your 1098 because your lender files it with them. You do not need to attach your 1098 to your return or upload it to the IRS. However, you should keep it with your tax records for at least three years in case the IRS asks questions about your deduction. If you file electronically, your tax software will usually prompt you to enter the 1098 information, and the software will handle the rest.

Different types of 1098 forms and which one you receive

The most common form is the 1098 Mortgage Interest Statement, which is what most homeowners receive. However, there are other 1098 variants for different situations. The 1098-T is for education expenses and comes from schools, not lenders. The 1098-Q is for ABLE account distributions. The 1098-E is for student loan interest paid. If you have a home equity line of credit (HELOC) or a second mortgage, your lender may send a separate 1098 for that loan.

If you have multiple mortgages on the same property — for example, a first mortgage and a HELOC — you will receive a separate 1098 from each lender. Add up the interest from all of them if you itemize. The property tax deduction is still capped at $10,000 total, even if you have multiple loans.

Frequently Asked Questions

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

No. The IRS already has a copy because your lender files it with them. You only need to enter the information from your 1098 into your return (usually through tax software). Keep the form itself in your records for three years.

What if I paid off my mortgage early — do I still get a 1098?

You will receive a 1098 for the year you paid it off, showing the interest you paid through the payoff date. If you paid off the loan before December 31, the interest shown will be less than a full year's worth. You can still deduct it if you itemize.

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

No. Mortgage interest is only deductible if you itemize deductions on Schedule A. If your total itemized deductions are less than the standard deduction, you use the standard deduction instead and cannot claim the mortgage interest.

Why does my 1098 show less interest than I expected?

The 1098 shows only the interest that accrued through December 31. If you made extra payments or paid off the loan early, less interest accrued. If you refinanced mid-year, each lender reports only the interest for the months they held the loan.

What if my lender sends me a corrected 1098?

If you already filed your return with the original numbers, you will need to file an amended return (Form 1040-X) using the corrected 1098 information. Do this as soon as you receive the corrected form to avoid IRS notices.