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

The 1098 form is a tax document your lender or servicer sends you each January. It lists the mortgage interest and property taxes you paid in the previous calendar year. You use these numbers when you file your tax return to claim deductions on Schedule A if you itemize rather than take the standard deduction.

Your lender is required by law to send you a 1098 if you paid $600 or more in mortgage interest during the year. Some lenders send it even if you paid less. The form goes to you and to the IRS, so the IRS already knows what your lender reported about your payments.

You will receive the 1098 from whoever holds your mortgage note — often a bank, credit union, or mortgage servicer. If your loan was sold during the year, you may receive multiple 1098 forms from different lenders, each reporting the interest paid while they held the loan.

Key Takeaways

  • The 1098 shows mortgage interest and property taxes paid in a calendar year, sent by your lender in January for the prior year.
  • You need the 1098 only if you itemize deductions on your tax return; if you take the standard deduction, you do not use it.
  • The form reports what your lender already reported to the IRS, so the numbers should match your own records.
  • If you paid less than $600 in mortgage interest, your lender may not send a 1098, but you can still deduct the interest if you have proof.

What information appears on the 1098

The 1098 has several boxes, but most homeowners use only two or three. Box 1 shows the total mortgage interest you paid during the year. Box 2 shows points paid on the loan (a one-time fee to lower your interest rate). Box 5 shows property taxes your lender paid on your behalf if they held the money in an escrow account.

The form also includes your loan number, the address of the property, and your lender's name and tax ID. Check that the address matches your home and that your name and Social Security number are correct. If you see an error, contact your lender right away — they can send you a corrected form.

Some boxes on the 1098 are less common. Box 3 shows mortgage insurance premiums your lender paid from escrow. Box 4 shows points the seller paid on your behalf (which you can deduct in the year you bought the home). These apply only in specific situations, so most 1098 forms will have zeros in these boxes.

When you use the 1098 to file your taxes

You use the 1098 only if you itemize deductions on Schedule A of your tax return. Itemizing means adding up deductible expenses — mortgage interest, property taxes, charitable donations, and medical expenses — and deducting that total instead of taking the standard deduction. The standard deduction is a flat amount the IRS allows everyone; for 2024 it is $14,600 for single filers and $29,200 for married couples filing jointly.

If your itemized deductions add up to less than the standard deduction, you will not benefit from itemizing, and you will not need the 1098. Many homeowners find that the standard deduction is larger than their itemized total, especially if they have a low mortgage balance or live in a state with low property taxes.

If you do itemize, you enter the mortgage interest from Box 1 of your 1098 on line 8 of Schedule A. You enter property taxes from Box 5 on line 5 of Schedule A. The IRS limits the total state and local taxes (including property tax) you can deduct to $10,000 per year, so if your property taxes are very high, you may hit that cap.

Discrepancies between your records and the 1098

Sometimes the amount on your 1098 does not match what you calculated from your monthly statements. This usually happens because of timing. If you made a payment on January 5 for December interest, your lender may have recorded it in January and reported it on the current year's 1098, even though the interest accrued in December.

Escrow accounts also cause confusion. If your lender collects property taxes through escrow and pays them on your behalf, the 1098 reports what the lender paid, not what you paid. If your escrow account was short one year and overfunded the next, the amount reported on the 1098 may be higher or lower than your actual tax bill.

If the difference is small — a few dollars — it usually reflects these timing or escrow issues and is not worth correcting. If the difference is large or you cannot explain it, call your lender's customer service line and ask them to walk you through the calculation. Keep your monthly statements so you can compare them to the 1098.

What to do if you do not receive a 1098

If your lender did not send you a 1098 by late January, contact them and ask for it. They are required to send it by January 31. If you paid less than $600 in mortgage interest, your lender may not be required to send one, but you can still deduct the interest you paid if you have proof — your monthly statements or a year-end summary from your lender's website.

If you bought a home late in the year and paid very little interest, you may not receive a 1098 from your lender. You can still deduct the interest; use your closing statement or monthly statements as proof of how much you paid.

If your loan was sold during the year, you may receive two 1098 forms — one from the original lender for the months they held the loan, and one from the new lender for the months after the sale. Add the interest from both forms together when you file your taxes.

Points and prepaid interest on the 1098

Points are an upfront fee you pay to lower your interest rate. One point equals 1 percent of the loan amount. If you paid points when you took out the loan, your lender reports them in Box 2 of the 1098, and you can deduct them over the life of the loan — not all in one year.

If you refinanced and paid new points, you can deduct those points over the life of the new loan. If you paid off the loan early — by selling the home or refinancing — you can deduct any remaining points in the year you paid off the loan.

The rules for points are complex, and the amount you can deduct each year depends on the loan term. If you paid points, ask a tax professional or use tax software that walks you through the calculation.

Frequently Asked Questions

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

No. The IRS receives a copy directly from your lender, so you do not need to send it in. Keep your 1098 with your tax records in case the IRS asks questions later. You do need to report the numbers from the 1098 on your tax return, but the form itself stays with you.

Can I deduct mortgage interest if I did not receive a 1098?

Yes. If you paid mortgage interest but your lender did not send a 1098 (usually because you paid less than $600), you can still deduct it. Use your monthly statements or a year-end summary from your lender to prove how much you paid. The IRS may ask for proof, so keep those documents.

What if the 1098 shows property taxes I did not actually pay?

This usually means your lender paid them from your escrow account. You can still deduct them because you funded the escrow account through your monthly payments. If you paid property taxes directly to your county and your lender also paid them from escrow, contact your lender — one of you made a mistake.

Does the 1098 include homeowners insurance?

No. Homeowners insurance is not tax-deductible for primary residences, so it does not appear on the 1098. Your lender may collect it through escrow, but it is not listed separately on the form.

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

No. The standard deduction is a flat amount that already accounts for common deductions. If you take the standard deduction, you cannot also deduct mortgage interest, property taxes, or other itemized expenses. You must choose one or the other.