The 1098 is a form your lender sends to report mortgage interest you paid

A 1098 form is a document your mortgage lender or home loan servicer mails to you each January. It reports how much mortgage interest and property taxes you paid during the previous year. The IRS also receives a copy so the agency can cross-check your tax return against what your lender reported.

You receive a 1098 only if you paid at least $600 in mortgage interest during the year. If you paid less, your lender is not required to send one, though some do anyway. The form arrives by January 31 and covers the calendar year that just ended — so the 1098 you get in January 2024 reports interest paid in 2023.

The 1098 matters because mortgage interest is tax-deductible if you itemize deductions on your tax return. Many homeowners use the numbers on this form to reduce their taxable income, which can lower the taxes they owe.

Key Takeaways

  • Your lender sends the 1098 by January 31 each year to report mortgage interest and property taxes you paid in the previous year.
  • You only receive a 1098 if you paid at least $600 in mortgage interest during the year.
  • The IRS gets a copy of your 1098, so the amounts must match what you report on your tax return.
  • Mortgage interest shown on the 1098 can be deducted from your taxable income if you itemize deductions rather than take the standard deduction.

What information appears on the 1098

The 1098 has several boxes, but the ones that matter most for taxes are Box 1 (mortgage interest paid) and Box 2 (property taxes paid). Box 1 is the number you use if you itemize deductions. Box 2 shows property taxes, which are also deductible but are capped at $10,000 per year under current federal tax law.

Other boxes on the form include the loan principal balance at the start and end of the year, points paid on the loan, and mortgage insurance premiums. These appear in boxes 3 through 11 and may be relevant depending on your situation, but Box 1 is what most homeowners focus on.

The form also shows the property address and your loan account number so you can match it to the correct mortgage if you have more than one. Your lender's name and tax ID appear at the top so you know which institution sent it.

When you need the 1098 to file your taxes

You need the 1098 only if you plan to itemize deductions on your tax return. Itemizing means listing out deductions like mortgage interest, property taxes, charitable donations, and medical expenses instead of taking the standard deduction — a flat amount the IRS allows everyone.

For 2023 taxes, the standard deduction was $13,850 for single filers and $27,700 for married couples filing jointly. If your mortgage interest, property taxes, and other deductible expenses add up to more than the standard deduction, itemizing saves you money. If they add up to less, you are better off taking the standard deduction and ignoring the 1098.

Many homeowners find that after the $10,000 cap on property taxes, their total deductions do not exceed the standard deduction, so the 1098 does not help them. A tax professional or tax software can help you figure out which approach saves you more.

Where to find your 1098 if it does not arrive

If you do not receive your 1098 by early February, contact your lender's customer service line. Ask them to resend it or provide the information in writing. Keep the phone number and date of the call in case you need to reference it later.

Some lenders allow you to read your 1098 from your online account portal instead of waiting for the paper copy. Log into your mortgage servicer's website and look for a section labeled "Tax Documents" or "1098 Form." This is often faster than waiting for mail.

If your lender cannot locate your form or says it was not sent because you paid less than $600 in interest, you can still report the actual interest you paid on your tax return. You will need your mortgage statement or year-end statement from your lender showing the interest paid. The IRS will not have a copy to compare against, but you can still deduct the amount if you have documentation.

How the 1098 connects to your tax return

If you itemize deductions, you report the mortgage interest from Box 1 of your 1098 on Schedule A of your Form 1040. Schedule A is where you list all your itemized deductions. The total of all your itemized deductions then reduces your taxable income.

For example, if your taxable income before deductions is $80,000 and you itemize $25,000 in deductions (including $15,000 in mortgage interest from your 1098), your taxable income drops to $55,000. You then pay taxes on that lower amount.

The IRS matches the mortgage interest reported on your 1098 against what you report on your tax return. If the numbers do not match, the IRS may send you a notice asking for an explanation. This is why it is important to use the exact figures from your 1098 rather than estimating.

What to do if the 1098 has an error

If the numbers on your 1098 do not match your mortgage statements, contact your lender right away. Errors happen — sometimes a payment is recorded in the wrong year, or a refinance is not processed correctly. Ask your lender to issue a corrected form, called a 1098-C or amended 1098.

Your lender must send the corrected form to you and the IRS. If the correction happens after you have already filed your tax return, you may need to file an amended return using Form 1040-X to report the correct amount. A tax professional can help you decide whether the difference is large enough to warrant amending.

Do not file your tax return with numbers you know are wrong just because they are on the 1098. The form is a report, not a command — you are responsible for reporting accurate information on your return.

Frequently Asked Questions

Do I have to use the numbers on my 1098 when I file taxes?

You must report accurate mortgage interest, but you do not have to use the 1098 as your only source. If the 1098 has an error and your mortgage statement shows the correct amount, use the correct amount. The IRS expects accuracy, not blind reliance on the form.

What if I paid off my mortgage during the year?

Your 1098 will show only the interest you paid before the payoff date. If you paid off the loan in June, the form covers January through June. You report only that amount on your tax return.

Can I deduct mortgage interest if I do not itemize?

No. Mortgage interest is only deductible if you itemize deductions on Schedule A. If you take the standard deduction, you cannot deduct mortgage interest separately. This is why many homeowners do not benefit from the 1098 — their total deductions do not exceed the standard deduction.

Do I need the 1098 if I refinanced my mortgage?

You will receive a 1098 from each lender you had during the year. If you refinanced in July, you get one form from your original lender (covering January through July) and another from your new lender (covering August through December). Report the interest from both forms.

What happens if my lender sends a 1098 but I paid less than $600 in interest?

Some lenders send a 1098 even when interest is below $600. Use the actual amount shown on the form. If your lender did not send one because interest was below $600, you can still report the interest you paid if you have documentation from your mortgage statements.