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

A 1098 form is a document your lender or mortgage servicer sends you each January showing how much mortgage interest and property taxes you paid in the previous year. The form exists so you can report these amounts on your federal tax return if you itemize deductions instead of taking the standard deduction.

You will receive a 1098 if you have a mortgage loan on a home and paid at least $600 in mortgage interest during the year, or if your lender collected property taxes through an escrow account. The form comes in several versions — the most common is the 1098 Mortgage Interest Statement — but they all serve the same basic purpose: documenting deductible housing costs.

The 1098 is not a bill and does not require you to do anything when ready. It is informational only. You use the numbers on it when you file your tax return to claim deductions, but only if itemizing makes sense for your situation.

Key Takeaways

  • The 1098 shows mortgage interest and property taxes paid during the year so you can deduct them on your federal return if you itemize.
  • Your lender must send you a 1098 by January 31 if you paid at least $600 in mortgage interest or if they collected property taxes through escrow.
  • You only benefit from the numbers on the 1098 if your total itemized deductions exceed the standard deduction for your filing status.
  • The form lists the loan number, the address of the property, and a breakdown of interest versus principal paid during the year.

What information appears on the 1098

The 1098 Mortgage Interest Statement contains several boxes, each reporting a specific dollar amount. Box 1 shows the mortgage interest you paid during the year. This is the amount most homeowners use for their deduction. Box 2 shows points paid on the loan — a one-time fee some borrowers pay to lower their interest rate — and these may also be deductible.

Box 4 lists property taxes your lender paid on your behalf if they collected them through escrow (the account where your lender holds money for taxes and insurance). Box 5 shows insurance premiums paid from escrow, though these are not deductible. The form also includes your loan number, the property address, and the lender's name and address.

The numbers on your 1098 come from your monthly mortgage statements throughout the year. If you paid extra toward principal or made additional payments, those do not appear on the 1098 because they are not deductible — only the interest portion counts.

When you actually use the 1098 to reduce your taxes

You use the 1098 only if you itemize deductions on Schedule A of your tax return. Itemizing means adding up all your deductible expenses — mortgage interest, property taxes, charitable donations, medical expenses, and others — and reporting that total instead of taking the standard deduction.

The standard deduction for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly. If your itemized deductions add up to more than that, itemizing saves you money. If they do not, you take the standard deduction and the 1098 numbers do not reduce your tax bill.

For example, if you are married, paid $8,000 in mortgage interest, paid $4,000 in property taxes, and donated $3,000 to charity, your itemized total is $15,000. That exceeds $29,200, so you would still take the standard deduction. But if you paid $12,000 in mortgage interest, $6,000 in property taxes, and $15,000 in charitable donations, your itemized total is $33,000, which exceeds the standard deduction, so itemizing saves you money.

Where to find your 1098 and what to do with it

Your lender mails the 1098 to your address on file by January 31 each year. You should receive it even if you paid off the loan during the year — the form covers only the interest paid while the loan was active. If you do not receive it by early February, contact your lender to request a copy or ask them to send it electronically.

Keep the 1098 with your tax records for at least three years. You do not send it to the IRS with your return, but you must have it available if the IRS ever asks questions about your deductions. If you use tax software or work with a tax preparer, you will enter the numbers from Box 1 (and Box 2 if applicable) into Schedule A when you file.

If you received a 1098 but did not actually pay that amount — for instance, if you sold the home mid-year or refinanced — check the form carefully. Contact your lender if the numbers do not match your records. Errors happen, and your lender can issue a corrected form if needed.

Different types of 1098 forms and which one you might receive

The 1098 Mortgage Interest Statement is the most common version and applies to most homeowners with a traditional mortgage. However, other 1098 variants exist for different situations. A 1098-T covers may have access to education expenses and is sent by schools. A 1098-Q covers ABLE account distributions. A 1098-R covers retirement distributions. If you have a home equity line of credit (HELOC) or a second mortgage, your lender may send a separate 1098 for that loan.

The key difference is what deductions each form documents. For homeowners, the mortgage interest 1098 is what matters for housing-related deductions. If you receive multiple 1098 forms, each one reports different income or deductions, and you enter each into the appropriate place on your return.

Why the $600 threshold exists and what happens if you do not reach it

Lenders are required to send a 1098 only if you paid at least $600 in mortgage interest during the year. This threshold exists to reduce paperwork for loans where the deduction would be minimal. If you paid less than $600 in interest — perhaps because you paid off the loan early, made a large down payment, or have a very low interest rate — your lender may not send a 1098.

If you did not receive a 1098 but you know you paid mortgage interest, you can still deduct it. Look at your monthly mortgage statements to find the interest paid each month, add them up, and report that total on Schedule A. You do not need the 1098 form itself; it is just a convenience document. Keep your statements as proof in case the IRS asks.

Common mistakes people make with the 1098

One frequent error is assuming the 1098 automatically reduces your taxes. It does not — it only helps if you itemize, and most people do not. Another mistake is confusing the total mortgage payment with the deductible interest. Your monthly payment includes principal, interest, taxes, and insurance, but only the interest portion (shown on the 1098) is deductible.

A third mistake is not checking the 1098 for accuracy. If your lender made an error — perhaps they included a payment you made after the year ended, or they miscalculated — you need to catch it and request a corrected form. Do not assume the form is correct just because it came from your lender.

Finally, some people throw away the 1098 thinking they do not need it. Even if you do not itemize this year, keep it for your records. Tax laws change, and you may want to itemize in a future year. The IRS can also ask about past returns, so having the original 1098 protects you.

Frequently Asked Questions

Do I have to report the 1098 even if I do not itemize?

No. If you take the standard deduction, you do not report the 1098 numbers on your return at all. The form is only used if you itemize deductions on Schedule A. You still keep the 1098 for your records, but it does not affect your tax filing.

What if I paid off my mortgage during the year?

Your lender will send a 1098 showing only the interest paid while the loan was active. For example, if you paid off the loan in June, the 1098 covers January through June only. You can deduct that interest if you itemize, but you cannot deduct interest on a loan that no longer exists.

Can I deduct property taxes if they do not appear on the 1098?

Yes. If your lender did not collect property taxes through escrow — meaning you paid them directly to your county — they will not appear on the 1098. You can still deduct them on Schedule A if you itemize. Look at your property tax bills or county records to find the amount paid during the year.

What if the 1098 shows a different amount than my mortgage statements?

Contact your lender when ready. Errors can happen, such as a payment posted to the wrong year or a calculation mistake. Ask your lender to review the form and issue a corrected 1098 if needed. Do not file your return using incorrect numbers.

Do I need the 1098 if I use tax software?

You will need the information from it. Most tax software asks you to enter the mortgage interest amount from Box 1 of the 1098. You can either type the numbers in manually or, if your lender offers it, import the form electronically. Either way, have the 1098 in front of you when you file.