What Is a Mortgage Tax Statement? Form 1098 and Your Interest Deduction

A mortgage tax statement is IRS Form 1098, the one-page document your lender mails or posts online each January showing how much mortgage interest you paid during the previous year. The interest figure on that form is what you use to claim the mortgage interest deduction on your federal return, but only if you itemize instead of taking the standard deduction. For the 2026 tax year, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers, so Form 1098 only lowers your tax bill if your total itemized deductions clear those thresholds.¹

What Form 1098 Actually Is

Form 1098, officially the Mortgage Interest Statement, is an informational return your lender files with the IRS whenever it collects $600 or more in mortgage interest from you during the calendar year.² One copy goes to you, another to the IRS. That’s how the government checks whether the interest deduction on your return matches what your lender actually reported collecting. It isn’t a bill. It’s a year-end summary of money you already paid.

If your lender collected less than $600 in interest from you during the year, it doesn’t have to send a Form 1098. You can still deduct whatever interest you paid; you’ll just need to pull the figure from your own records or your servicer’s online portal.

Reading the Boxes on Your Form

Form 1098 splits your year on the loan into numbered boxes.³

Box 1 shows the total mortgage interest your lender collected from you during the year. This is the number that feeds your deduction.
Box 2 shows your outstanding loan balance as of January 1, or as of the origination or acquisition date if the loan started during the year.
Box 4 shows any refund of interest you had overpaid in a prior year. That amount reduces what you can claim; don’t add it to your deduction.
Box 5 shows mortgage insurance premiums (PMI or government mortgage insurance) you paid. The federal deduction for these premiums expired after 2021, so an amount may appear here that isn’t currently deductible. A bill to reinstate the deduction has been introduced but not enacted as of mid-2026.⁴
Box 6 shows discount points you paid at closing on the purchase of your principal residence. Points are prepaid interest used to buy down your rate.
Box 10 is a catch-all. Servicers often use it to report real estate taxes or homeowners insurance paid from your escrow account. Property taxes may be deductible separately on Schedule A, subject to the SALT cap.

When Form 1098 Actually Saves You Money

Here’s the part that surprises many homeowners: the interest on your Form 1098 only reduces your tax bill if you itemize on Schedule A. You can’t itemize and take the standard deduction. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.¹

If your total itemized deductions (mortgage interest, state and local taxes, charitable contributions, and other qualifying expenses combined) come in under the standard deduction for your filing status, the standard deduction wins. Plenty of homeowners with smaller loan balances or lower rates land there. Form 1098 is still useful because it lets you run the comparison each year rather than guessing.

How Much of Your Mortgage Interest Qualifies

Even when itemizing makes sense, there’s a ceiling on how much mortgage debt qualifies for the interest deduction, and it depends on when you took the loan out.⁵

Loans taken out after December 15, 2017: interest deductible on up to $750,000 of mortgage debt, or $375,000 if married filing separately. This limit was made permanent by the One Big Beautiful Bill Act.
Loans taken out on or before December 15, 2017: the older $1,000,000 limit applies ($500,000 married filing separately). These loans are grandfathered under pre-Tax Cuts and Jobs Act rules.

For most homeowners with a single mortgage well under $750,000, this doesn’t affect anything. You deduct every dollar in Box 1. If your loan balance sits close to or above the cap, only a portion of your interest qualifies, and IRS Publication 936 includes a worksheet for the calculation.

The interest also has to be on a “qualified home,” meaning your main residence and up to one second home, and the loan must be secured by the property.⁶ An unsecured personal loan used to buy a house doesn’t qualify even if a Form 1098 shows up for it.

Putting the Number on Your Return

Deductible interest from your Form 1098 goes on Schedule A (Form 1040), line 8a.⁶ If you paid additional deductible mortgage interest that wasn’t reported on any Form 1098, such as interest to a private lender that wasn’t required to file one, that goes on line 8b. Tax software pulls these numbers in automatically once you enter the figures from your form.

For a borrower with a single loan under $750,000 on a primary home, reporting is simple: enter Box 1 on line 8a and move on. Borrowers over the cap need the Publication 936 worksheet before entering a figure.

Points, HELOCs, and Property Taxes

Points paid to purchase your primary home can generally be deducted in full in the year you paid them, provided they meet the usual conditions: they were figured as a percentage of the loan, they’re customary for your area, and you brought enough cash to closing to cover them rather than rolling them into the loan.⁷ Points paid on a refinance work differently. You typically spread the deduction evenly over the life of the new loan. Pay $3,000 in points on a 30-year refinance and you deduct $100 per year. The exception: if part of the refinance proceeds paid for improvements to your principal residence, the portion of the points tied to those funds may be deductible in the year paid.

Interest on a home equity loan or HELOC is deductible only if you used the borrowed money to buy, build, or substantially improve the home securing the loan.⁸ Using a HELOC to consolidate credit cards, pay tuition, or cover living expenses doesn’t qualify. “Substantial improvement” means projects that add value, extend the home’s useful life, or adapt it to new uses; a kitchen renovation counts, repainting doesn’t. If you used HELOC funds for a mix of qualifying and non-qualifying spending, only the interest tied to the improvement portion is deductible. Keeping HELOC draws in a separate account and holding on to renovation receipts makes that portion easy to defend if the IRS asks. HELOC balances also count toward the same $750,000 or $1,000,000 overall debt cap, so a $600,000 first mortgage plus a $200,000 HELOC pushes you above the post-2017 limit.

If Box 10 of your Form 1098 reports real estate taxes paid from escrow, those taxes are deductible on Schedule A separately from mortgage interest, but they fall under the state and local tax cap. The One Big Beautiful Bill Act raised the SALT cap from $10,000 to $40,000 beginning in 2025, with small annual inflation adjustments through 2029. That cap covers your state income taxes (or sales taxes), local taxes, and property taxes combined.

When the Form Arrives, and What If You Get Several

Your lender must deliver Form 1098 to you by January 31 covering the prior calendar year.² Most servicers post the document to their online portal before the paper copy arrives, so checking your account in mid-to-late January is the fastest route. Look for a section labeled “Tax Documents” or “Year-End Statements.”

You may get more than one Form 1098 for the same property in a year when you refinanced or when servicing was transferred. Each servicer reports only the interest it collected while it held the loan. Add the Box 1 amounts from every form together to get your total deductible interest. Don’t skip one because it covers only a short window. The IRS received copies of all of them and will expect the total on your return to match.

If the Number on Your Form Is Wrong

Compare Box 1 against your own payment records or monthly statements. Errors do happen, especially when loans are transferred between servicers mid-year. If the numbers don’t line up, contact your servicer and ask for a corrected form. Lenders file corrections with the IRS using the procedures in the Form 1098 instructions, and you should receive a new copy marked “CORRECTED” at the top.⁹

Don’t file using a number you know is wrong just because it printed on the form. If your servicer drags its feet and the filing deadline is close, use your own records to report the accurate interest amount on Schedule A and attach a brief explanation. The IRS may follow up, but reporting the correct figure is always better than filing with a deduction you know is off.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Internal Revenue Service. About Form 1098, Mortgage Interest Statement
3
Internal Revenue Service. Form 1098 – Mortgage Interest Statement
4
U.S. Congress. H.R.918 – 119th Congress (2025-2026) Mortgage Insurance Tax Deduction Act
5
Office of the Law Revision Counsel. 26 USC 163 – Interest
6
Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction
7
Internal Revenue Service. Topic No. 504, Home Mortgage Points
8
Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction
9
Internal Revenue Service. Instructions for Form 1098