Do I Have to File Form 1098 on My Taxes?

Each year, homeowners receive Form 1098, Mortgage Interest Statement, from their mortgage lender, which summarizes the interest paid over the past year. The form itself is an informational document provided to you and the Internal Revenue Service (IRS). Understanding the data presented on the form is the first step before determining its use on your annual tax filing.

Understanding Your Form 1098

Form 1098 provides a breakdown of payments made on your mortgage, and each box reports a specific figure. Box 1 shows the total mortgage interest you paid, representing the portion of your monthly payments that went toward the cost of borrowing. The form also includes other data, such as the outstanding mortgage principal at the start of the year in Box 2 and the mortgage origination date in Box 3.

Box 5 reports mortgage insurance premiums, which are often required by lenders when a borrower makes a down payment of less than 20 percent. While these payments were eligible for a tax deduction for several years, that provision expired at the end of 2021. For the 2024 tax year, the amount shown in Box 5 is not deductible on your federal tax return.

Box 6 contains the value of any points you paid when purchasing your principal residence. Points are a form of prepaid interest, where one point equals one percent of the loan amount, paid at closing to reduce the ongoing interest rate. If you purchased a new home during the tax year, this box will show the amount you can potentially deduct. Other boxes, such as Box 4 for refunds of overpaid interest or Box 10 for the property’s address, provide a complete financial picture.

Requirements for Deducting Mortgage Interest

The ability to use the information from Form 1098 depends on your decision to itemize deductions. Every taxpayer has the choice between taking the standard deduction—a flat-dollar amount that reduces your taxable income—or itemizing by listing individual deductible expenses on Schedule A of Form 1040. You should choose the method that results in the largest total deduction.

For the 2024 tax year, the standard deduction is $29,200 for married couples filing jointly, $21,900 for heads of household, and $14,600 for those who are single or married filing separately. If your total itemized deductions, including mortgage interest and other contributions, do not exceed your standard deduction amount, then taking the standard deduction is more advantageous. Consequently, you would not use the mortgage interest figure from your Form 1098.

If itemizing is the better choice, the loan must meet specific criteria. The mortgage must be a secured debt, meaning the home serves as collateral, and it must be for a qualified home, which can be your main residence or a second home. The loan must also be for “acquisition indebtedness,” meaning the funds were used to buy, build, or substantially improve the property. Under the Tax Cuts and Jobs Act of 2017, interest is deductible on mortgage debt up to $750,000 ($375,000 if married filing separately). For mortgages obtained before December 16, 2017, a higher limit of $1 million applies ($500,000 if married filing separately).

How to Report Mortgage Interest on Your Tax Return

You do not file or attach Form 1098 to your tax return. The lender that sent you the form has also sent an identical copy to the IRS, so the government is already aware of the amount of interest you paid. The form is for your personal records and serves as a guide for accurately completing your tax return if you choose to itemize.

The process of reporting this information begins with Schedule A (Form 1040), Itemized Deductions. The total mortgage interest paid, found in Box 1 of your Form 1098, is entered on line 8a of Schedule A. If you paid points at the time of purchase, as reported in Box 6, this amount is added to your mortgage interest and included in the total on line 8a.

After transferring the relevant figures to Schedule A and completing the rest of the form, the total of your itemized deductions is calculated and entered on your main Form 1040.