Do I Need to Enter 1098 If I Take the Standard Deduction?
Understand when entering your Form 1098 is necessary. While not required for a federal standard deduction, it can impact state returns or confirm your best option.
Many taxpayers question whether they need to enter their Form 1098 information if they take the standard deduction. This decision depends on the form’s purpose and how it interacts with different deduction methods. This guide clarifies when entering your Form 1098 is necessary and when it is not.
Understanding Form 1098 and the Standard Deduction
Form 1098, the Mortgage Interest Statement, is a document from your mortgage lender reporting the interest and related expenses you paid on your mortgage during the year. Its primary function is to substantiate the mortgage interest deduction, a benefit available to taxpayers who itemize deductions on Schedule A (Form 1040). This deduction allows homeowners to subtract interest paid on up to $750,000 of mortgage debt from their taxable income.
The standard deduction is a fixed-dollar amount that you can subtract from your adjusted gross income (AGI) instead of itemizing. The amount is determined by your filing status, age, and whether you are blind. For the 2025 tax year, the standard deduction is $15,000 for single filers and $30,000 for those who are married filing jointly. Taxpayers choose whichever deduction method results in a lower tax liability.
Entering Form 1098 When Taking the Standard Deduction
For federal tax purposes, if you are certain you will take the standard deduction, you do not need to enter the information from your Form 1098. The data on this form is only used to calculate itemized deductions. Since the standard deduction replaces the need to itemize, the figures from Form 1098 are irrelevant to your federal tax calculation.
Many tax preparation software programs will still prompt you to enter your Form 1098 details. This is part of their process to explore all potential deductions. The software uses this information to compare your potential itemized deductions against the standard deduction. You should retain Form 1098 with your tax documents for your records.
When You Might Still Enter Your Form 1098
There are situations where entering your Form 1098 information is a good idea, even if you take the standard deduction on your federal return. A primary reason is for state tax purposes. Some states have tax laws that differ from federal rules, allowing you to deduct mortgage interest on your state return even if you don’t itemize federally. Entering the data ensures it is available for your state filing.
Entering your Form 1098 data also allows tax software to perform an accurate comparison between itemizing and taking the standard deduction. This is useful if your total deductible expenses are close to the standard deduction amount. By inputting the mortgage interest and other deductions, the software can confirm that the standard deduction is the better option, preventing you from missing out on a larger tax break.