IRS Form 1098, Mortgage Interest Statement: Boxes and Deductions

IRS Form 1098, the Mortgage Interest Statement, is the year-end document your lender sends showing how much mortgage interest you paid during the calendar year. You don’t fill it out. Your lender does, and files a copy with the IRS. The number in Box 1 is the one you’ll use: it goes on Schedule A, line 8a, when you itemize deductions on your Form 1040. Lenders must send the form by January 31 of the year after the tax year it covers.

Who Gets a Form 1098 and When

Any bank, credit union, mortgage servicer, or other person in the business of receiving mortgage interest must send you Form 1098 if you paid $600 or more in interest during the calendar year. That threshold comes from 26 U.S.C. § 6050H, which also requires the lender to file a matching copy with the IRS.¹ A private seller who financed your purchase can also be on the hook for issuing one if the financing was part of a trade or business.

If you paid less than $600 in interest, your lender isn’t required to send the form, but you can still deduct the interest. You report it on Schedule A line 8b instead of 8a, along with the recipient’s name, address, and taxpayer identification number.²

When two or more people share a mortgage, the lender issues a single 1098 to the “payer of record” — the borrower named first on the lender’s books. Co-borrowers who don’t receive their own copy can still deduct their share of the interest, again on line 8b, with the payer of record’s name and address noted.³

What Each Box on Form 1098 Reports

The form has eleven boxes. Most homeowners only care about a few of them, but each has a specific meaning:

Box 1 — Mortgage Interest Received: Total interest the lender collected from you during the tax year. This is your deduction figure.
Box 2 — Outstanding Mortgage Principal: Loan balance as of January 1 of the tax year, or as of the origination or acquisition date if the loan started that year. It matters for the deduction caps described below.⁴
Box 3 — Mortgage Origination Date: Date the loan was first created. This determines which deduction cap applies.
Box 4 — Refund of Overpaid Interest: Any interest the lender refunded or credited to you from a prior year. Don’t subtract this from Box 1.⁵
Box 5 — Mortgage Insurance Premiums: PMI, FHA mortgage insurance, VA funding fees, and USDA guarantee fees paid during the year.
Box 6 — Points Paid on Purchase of Principal Residence: Points paid at closing to lower your rate. Often fully deductible in the year of purchase.
Box 7 — Property Address Checkbox: Checked when the mortgaged property’s address matches your mailing address on the form.
Box 8 — Property Address: Street address or legal description of the mortgaged property when it differs from your mailing address.
Box 9 — Number of Mortgaged Properties: Filled only when more than one property secures the loan; blank means one.
Box 10 — Other: A catch-all the lender may use for items such as real estate taxes or insurance paid out of your escrow account.
Box 11 — Mortgage Acquisition Date: Date a new servicer took over your loan mid-year. Blank if your servicer didn’t change.⁴

Before you use the form, check that your Social Security number, the property address, and the interest total look right. If Box 1 doesn’t roughly match what your payment history would suggest, call your servicer and ask for a corrected form before you file.

How to Report Form 1098 on Your Tax Return

The Box 1 interest figure goes on Schedule A (Form 1040), line 8a — the line specifically designated for mortgage interest reported on a 1098.⁶ Deductible points from Box 6 get added to the same line. Tax software will typically prompt you to enter each box value and place them on the return for you.

Reporting mortgage interest on Schedule A only cuts your tax bill if your total itemized deductions exceed the standard deduction for your filing status. For the 2026 tax year, the standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers, and $24,150 for heads of household.⁷ Add your mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and other itemizable expenses. If the total doesn’t clear the standard deduction, take the standard deduction instead. The lender still files your 1098 with the IRS either way.

How Much Mortgage Interest You Can Deduct

The cap on deductible mortgage interest depends on when you took out the loan.

Loans originating on or before December 15, 2017: Interest is deductible on up to $1 million of acquisition debt ($500,000 if married filing separately).
Loans originating after December 15, 2017: The cap drops to $750,000 ($375,000 if married filing separately).

The limits apply to the combined balance of all mortgages on your primary and second home. A $600,000 first mortgage plus a $250,000 home equity loan, both taken out after 2017, totals $850,000 — you can only deduct interest on the first $750,000 of that combined debt.⁸

Refinancing a pre-2018 loan preserves the higher $1 million cap, but only up to the balance of the old loan at the time of refinancing. Any additional cash pulled out in a cash-out refinance falls under the $750,000 limit.

Home Equity Loans and HELOCs

Interest on a home equity loan or HELOC is deductible only if you used the borrowed funds to buy, build, or substantially improve the home securing the loan. “Substantially improve” covers projects that add value or extend the home’s useful life, like a kitchen remodel or a new roof. Routine repairs and repainting generally don’t qualify.² If you used a HELOC to pay off credit cards or cover tuition, that portion of the interest isn’t deductible regardless of what your 1098 shows. Keep contractor invoices and bank statements tying draws to specific improvement projects in case the IRS asks.

Mortgage Insurance in Box 5

Box 5 reports PMI, FHA mortgage insurance, VA funding fees, and USDA guarantee fees. Whether these premiums are deductible has shifted over the years. The deduction expired after 2021 and was restored permanently beginning with the 2026 tax year, treating qualifying mortgage insurance premiums as deductible mortgage interest.³ A figure in Box 5 goes on Schedule A with your mortgage interest, and it’s still subject to the same itemize-versus-standard-deduction math.

Handling Box 4: Refunds of Prior-Year Interest

Box 4 shows interest the lender refunded or credited to you from a prior year. Leave Box 1 alone; it already reflects only the current year’s interest. The Box 4 amount may need to be reported as income on the return for the year you receive it, but only if you itemized in the year the overpayment happened and the deduction actually reduced your tax. If you took the standard deduction that earlier year, the refund isn’t taxable. When multiple borrowers share the mortgage, each co-borrower may owe tax on their share of the refund.⁵

What to Do if Your Form 1098 Is Wrong

Errors are common when a loan transfers mid-year: interest gets double-counted, escrow adjustments throw off Box 5, or a servicer merger garbles borrower data. If a figure looks off, call your servicer and ask for a corrected form before you file. The corrected version arrives with the “CORRECTED” checkbox at the top of the form marked.

If your lender won’t fix the form in time, file using the figures you believe are accurate based on your own payment records, and keep the documentation. The IRS matches what you report against what the lender filed, and a mismatch can trigger a notice, but reporting accurate numbers you can prove is better than repeating figures you know are wrong.

1
Office of the Law Revision Counsel. 26 U.S. Code 6050H – Returns Relating to Mortgage Interest Received in Trade or Business From Individuals
2
Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction
3
Internal Revenue Service. Instructions for Form 1098 – Mortgage Interest Statement
4
Internal Revenue Service. Instructions for Form 1098
5
Internal Revenue Service. Mortgage Interest Statement
6
Internal Revenue Service. Schedule A (Form 1040)
7
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
8
Office of the Law Revision Counsel. 26 USC 163 – Interest