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

The 1098 form is a document your mortgage lender sends you each January. It lists two things: the mortgage interest you paid in the previous year and the property taxes your lender paid on your behalf (if it held them in escrow). You use these numbers when you file your tax return to claim deductions if you itemize rather than take the standard deduction.

The form comes in several versions. The most common is the 1098 Mortgage Interest Statement, which applies to most homeowners with a traditional mortgage. Other versions exist for student loan interest (1098-T) and may have access to education expenses, but this guide focuses on the mortgage version.

You do not have to do anything with the 1098 when it arrives. It is informational—your lender sends it to you and to the IRS so both of you have the same record. If you plan to itemize deductions on your tax return, you will need the numbers from this form.

Key Takeaways

  • Your lender mails the 1098 by January 31 each year, reporting mortgage interest and property taxes paid in the previous year.
  • You only need the 1098 if you itemize deductions on your tax return; if you take the standard deduction, the form does not affect your taxes.
  • The form shows interest paid, not principal, and property taxes your lender paid from escrow if your loan included that service.
  • If you paid off a mortgage mid-year or refinanced, you may receive multiple 1098 forms from different lenders.
  • Check the 1098 against your own records; if the numbers look wrong, contact your lender to request a corrected form.

What numbers appear on the 1098 and what they mean

The 1098 has several boxes, but most homeowners focus on two. Box 1 shows the mortgage interest you paid during the year. This is the portion of your monthly payment that went toward interest rather than paying down the loan balance. In early years of a mortgage, this number is large; in later years, it shrinks as more of each payment goes to principal.

Box 2 shows property taxes your lender paid from your escrow account—the account where you deposit money each month to cover taxes and insurance. Not all mortgages include escrow; if yours does not, this box will be zero or blank. If you paid property taxes directly to your county without going through escrow, those taxes do not appear on the 1098, but you can still deduct them if you itemize.

Other boxes on the form track mortgage insurance premiums, points paid on the loan, and other details. For most homeowners, boxes 1 and 2 are the only ones that matter for tax purposes.

When you need the 1098 and when you do not

You need the 1098 only if you plan to itemize deductions on your tax return. Itemizing means listing out specific deductions—mortgage interest, property taxes, charitable donations, medical expenses—and adding them up. If that total is larger than the standard deduction for your filing status, you itemize and claim the larger amount.

If you take the standard deduction instead, the 1098 does not factor into your return at all. The standard deduction is a flat amount the IRS allows everyone; for 2024, it ranges from $14,600 to $23,200 depending on age and filing status. Many homeowners find the standard deduction is larger than their itemized deductions, so they use it and ignore the 1098.

A tax software program or tax preparer can help you decide which route saves you more money in a given year. Some years you may itemize; other years the standard deduction may be better.

What to do if you do not receive a 1098

If your lender does not send you a 1098 by January 31, contact them directly. Most lenders mail them automatically, but mistakes happen. Ask whether the form was mailed to the address on file and request a copy if it was lost.

If you paid off your mortgage during the year, you may receive a 1098 showing only the interest paid before payoff. If you refinanced, you may get two forms—one from your old lender and one from the new one. Both are correct; each lender reports only the interest you paid them.

If your lender says they did not send a 1098 because you paid no interest (for example, on a home equity line of credit with a zero balance), you do not need one. But if you know you paid interest and the lender cannot explain why no form was sent, ask them to issue a corrected one.

How to verify the numbers on your 1098

Before you use the 1098 in your tax return, check it against your own records. Pull up your mortgage statements from 2024 (or whichever year the form covers) and add up the interest shown on each monthly statement. That total should match box 1 on the 1098. If it does not, contact your lender and ask why.

Do the same for property taxes in box 2. If your lender held escrow, your monthly statement should show how much went into the escrow account each month. Add those up and compare to the 1098. Small differences of a few dollars can happen due to rounding, but large gaps mean something is wrong.

If you find an error, call your lender's customer service line and explain the discrepancy. They can issue a corrected 1098 (called a 1098-C) before tax season gets busy. It is easier to fix this in January than to deal with it later.

The difference between mortgage interest and principal

Your monthly mortgage payment covers two things: interest (the cost of borrowing the money) and principal (the actual loan balance). Only the interest portion is deductible. The 1098 reports interest only, so you do not have to separate them yourself.

Early in a 30-year mortgage, most of your payment goes to interest. On a $300,000 loan at 6.5%, your first payment might be $1,896, with $1,625 going to interest and only $271 to principal. By year 20, that same payment might split $800 to interest and $1,096 to principal. The 1098 captures only the interest side, which is what the IRS allows you to deduct.

If you want to see how much interest versus principal you paid in a given month, your mortgage statement breaks it down. But for tax purposes, trust the 1098—your lender has already done the math.

Property taxes, escrow, and the 1098

Property taxes appear on the 1098 only if your lender collected them in escrow and paid them to the county on your behalf. Many mortgages include this service: you add a portion of your annual property tax bill to your monthly payment, the lender holds that money in escrow, and when taxes are due, the lender pays the county directly.

If your mortgage does not include escrow, you pay property taxes directly to your county assessor's office. Those taxes do not show up on the 1098, but you can still deduct them on your return if you itemize. You will need to gather your property tax receipts or statements from the county instead.

Some states cap the property tax deduction at $10,000 per year (or $5,000 if married filing separately). Check your state's rules or ask a tax preparer whether this limit applies to you.

Frequently Asked Questions

Can I deduct mortgage interest if I do not itemize?

No. Mortgage interest is only deductible if you itemize deductions. If you take the standard deduction, you cannot claim mortgage interest separately. Many homeowners find the standard deduction is larger than their itemized deductions, so they use it and do not claim the 1098 at all.

What if my 1098 shows a different amount than I expected?

Compare it to your monthly mortgage statements. Add up the interest shown on each statement for the year; it should match box 1 on the 1098. If there is a large gap, contact your lender. Small differences of a few dollars are normal due to rounding, but anything larger should be investigated.

Do I need to attach the 1098 to my tax return?

No. The 1098 is informational. Your lender sends a copy to the IRS, so the agency already has the information. You keep your copy for your records and use the numbers when you fill out your return, but you do not mail it in.

What happens if I lose my 1098?

Contact your lender and request a duplicate. They can remail it or provide the numbers over the phone. You can also use your monthly mortgage statements to reconstruct the interest paid if needed, though the 1098 is easier.

If I paid off my mortgage early, will I still get a 1098?

Yes, but it will show only the interest paid before you paid off the loan. If you paid off in June, the 1098 will cover January through June only. This is correct—you can only deduct interest you actually paid.