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

The 1098 form is a tax document your mortgage lender sends you each January. It lists the mortgage interest and property taxes you paid in the previous calendar year. You use these numbers to claim deductions on your federal tax return if you itemize deductions instead of taking the standard deduction.

The form comes in several versions — the most common is the 1098 (Mortgage Interest Statement), but you may also receive a 1098-T (education credits), 1098-S (student loan interest), or 1098-Q (ABLE account contributions). This guide focuses on the mortgage 1098, which is what most homeowners encounter.

The lender is required by the IRS to send you this form and file a copy with the government. You do not need to attach the 1098 to your tax return, but you do need the numbers from it to fill out your return correctly.

Key Takeaways

  • The 1098 shows mortgage interest and property taxes paid during the year, which you can deduct if you itemize rather than take the standard deduction.
  • Your lender must send the 1098 by January 31 each year for the previous calendar year.
  • The form lists the loan number, interest paid, property taxes paid, and points paid on a new mortgage, among other details.
  • You do not attach the 1098 to your return, but you use the numbers from it to fill out Schedule A if you itemize deductions.

What information appears on the 1098

The 1098 contains several boxes, each reporting a different amount. Box 1 shows the mortgage interest you paid during the year. This is the largest number on the form and the one most people use for their deduction.

Box 2 reports property taxes you paid through an escrow account (money your lender held and paid to the county on your behalf). If you paid property taxes directly to your county, those do not appear here, but you can still deduct them if you have proof of payment.

Box 3 shows points paid on a new mortgage — a one-time fee some borrowers pay to lower their interest rate. Points can sometimes be deducted in the year paid, though the rules depend on whether the loan is for a primary home or investment property.

The form also includes your loan number, the address of the property, and the lender's name and address. Check that the property address matches your home; if it does not, contact your lender to correct it.

When you receive the 1098 and what to do with it

Lenders must send the 1098 by January 31 of the year following the tax year. If you do not receive it by early February, contact your lender's tax department and ask them to resend it or provide a transcript of the amounts.

Keep the 1098 with your tax records for at least three years. The IRS can audit your return for up to three years after you file, and you will need proof of the amounts you claimed.

When you prepare your tax return, you will use the numbers from the 1098 only if you itemize deductions on Schedule A. If you take the standard deduction instead, the 1098 numbers do not affect your return. Many people take the standard deduction because it is larger than their itemized deductions would be, so they never use the 1098 at all.

How the 1098 affects your tax deduction

If you itemize, you can deduct the mortgage interest shown in Box 1 of the 1098. However, there is a limit: you can only deduct interest on up to $750,000 of mortgage debt (or $375,000 if you are married filing separately). If your loan is larger than that, only the interest on the first $750,000 is deductible.

You can also deduct property taxes, but the total of all state and local taxes (including property tax, income tax, and sales tax) is capped at $10,000 per year. This means if you pay high income taxes in your state, you may not be able to deduct all of your property taxes.

The deduction is only valuable 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 couples filing jointly. If your mortgage interest plus property taxes plus other deductible expenses do not add up to more than that, itemizing will not lower your taxes.

Errors on the 1098 and how to fix them

If the 1098 shows the wrong amount of interest or property taxes, contact your lender when ready. The most common errors are interest amounts that do not match your payment records or property taxes that include amounts you paid directly to the county.

If your lender made an error, they will send you a corrected 1098 (marked as a correction) by the end of February. If you already filed your return with the wrong numbers, you can file an amended return (Form 1040-X) once you have the corrected 1098.

If the lender refuses to correct a clear error, you can file your return using the correct amount and keep documentation of your payments. The IRS will accept the corrected amount if you can prove it with bank statements or mortgage statements.

The 1098 versus other mortgage documents

The 1098 is different from your mortgage statement, which you receive monthly. The monthly statement shows your principal payment, interest payment, and escrow deposits for that month. The 1098 is an annual summary sent only for tax purposes.

You may also receive a 1099-S if you sold your home during the year. That form reports the sale price and is used to determine whether you owe capital gains tax. The 1098 and 1099-S serve different purposes and both may appear on your tax return in different years.

Some borrowers also receive a Form 1098-T if they paid higher education expenses, or a 1098-S if they paid student loan interest. These are separate forms for different types of deductions and are not related to your mortgage 1098.

When the 1098 does not arrive

If you do not receive the 1098 by mid-February, call your lender's tax department. Have your loan number and the address of the property ready. They can tell you whether the form was mailed to the wrong address or if there was a delay in processing.

If the lender cannot locate the form, ask them to provide a written statement of the interest and property taxes paid during the year. You can use this statement in place of the 1098 when you file your return, though you should keep trying to get the actual form for your records.

If you filed your return without the 1098 and later received it, you do not need to amend unless the amount on the form is significantly different from what you reported. Small differences (within $50 or so) are usually not worth amending for, but large discrepancies should be corrected with Form 1040-X.

Frequently Asked Questions

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

No. The 1098 stays with your records. You use the numbers from it to fill out Schedule A (itemized deductions) on your return, but you do not send the form itself to the IRS. The lender files a copy with the IRS separately.

What if I paid off my mortgage during the year?

The 1098 will show only the interest paid before the payoff date. If you paid off the loan in June, the form covers January through June. You can deduct that interest if you itemize, even though you no longer have a mortgage.

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

No. The standard deduction is a flat amount that covers all deductible expenses. If you take it, you cannot also deduct mortgage interest, property taxes, or other itemized deductions. You must choose one or the other.

What if my lender did not send a 1098 but I paid mortgage interest?

Contact the lender and ask for a transcript or corrected form. If they cannot provide one, use your mortgage statements to calculate the interest paid and file your return with that amount. Keep the mortgage statements as proof in case the IRS asks questions.

Does the 1098 include principal payments?

No. The 1098 shows only interest and property taxes. Principal payments are not deductible and do not appear on the form. Your monthly mortgage statement breaks down principal and interest separately if you need to verify the amounts.