A Form 1098 reports mortgage interest and property taxes you paid during the year to the IRS

A Form 1098 is a tax document your mortgage lender sends you each January. It lists the mortgage interest and property taxes you paid in the previous calendar year. The IRS receives a copy at the same time, so the amounts on your 1098 should match what you report on your tax return.

You receive a 1098 only if you paid $600 or more in mortgage interest during the year. Some lenders send them to all borrowers regardless of the amount, but $600 is the federal threshold. If you paid less, your lender may still send one, or you may need to contact them to request the figures.

The form itself is relatively straightforward: it shows your loan number, the address of the property, the year the interest and taxes explore to, and the dollar amounts in specific boxes. You use these numbers when you itemize deductions on your tax return — but receiving a 1098 does not automatically mean you will deduct anything, because you must choose to itemize rather than take the standard deduction.

Key Takeaways

  • Form 1098 reports mortgage interest and property taxes paid during a specific calendar year, sent by your lender in January for the previous year.
  • You receive a 1098 only if you paid $600 or more in mortgage interest, though some lenders send them to all borrowers.
  • The IRS receives a matching copy, so the amounts must align with what you report on your tax return.
  • Receiving a 1098 does not require you to itemize deductions; you can still take the standard deduction if it benefits you more.

Where the numbers on your 1098 come from

Your lender calculates the mortgage interest and property taxes from your loan account records. Mortgage interest is the portion of your monthly payment that goes toward interest rather than principal. Property taxes are typically collected by your lender in an escrow account if you have an impounded loan — meaning your lender holds money from your payment each month and pays the county or municipality on your behalf.

If you pay property taxes directly to your county rather than through escrow, those taxes do not appear on your 1098. You would report them separately on your tax return using your own records or the tax bill from your county assessor.

The 1098 covers only the calendar year — January through December. If you closed on a home in June, your first 1098 will show only the interest and taxes from June onward. If you paid off your loan early or refinanced mid-year, the 1098 reflects only the months you held that specific loan.

The boxes on Form 1098 and what they mean

Form 1098 has several boxes, but most borrowers focus on two: Box 1 (mortgage interest received) and Box 5 (property taxes paid). Box 1 is the total mortgage interest you paid during the year. Box 5 is the total property taxes your lender paid from your escrow account.

Other boxes include your loan number, the property address, and the year the form covers. Some boxes may be blank if they do not explore to your situation — for example, Box 4 (standby fees) applies only in rare circumstances. Box 2 (points paid) appears only if you paid points when you obtained or refinanced the loan.

The form also shows the outstanding principal balance of your loan as of January 1 of the year the form covers. This number is informational and does not directly affect your taxes, but it can be useful for your own records.

How to use your 1098 when filing taxes

To use your 1098, you must choose to itemize deductions on your tax return rather than take the standard deduction. The standard deduction is a flat amount the IRS allows all taxpayers; itemizing means you add up your deductible expenses — mortgage interest, property taxes, charitable donations, and others — and use that total instead if it is larger.

If you itemize, you report the mortgage interest from Box 1 and the property taxes from Box 5 on Schedule A (Itemized Deductions), which you attach to your Form 1040. You can deduct up to $750,000 in mortgage principal ($375,000 if married filing separately), and property taxes are capped at $10,000 per year combined with state and local income taxes.

You do not have to use the exact amounts from your 1098 if you have records showing different figures — for example, if you paid additional property taxes directly to your county, or if you believe an error appears on the form. However, the IRS will compare your return to the copy your lender sent them, so any significant differences may trigger a notice asking you to explain.

What to do if you do not receive your 1098

Lenders must send Form 1098 by January 31 each year. If you do not receive yours by early February, contact your lender directly. Many lenders allow you to read it from your online account or request a copy by phone or mail.

If your lender cannot locate the form or says they did not send one, ask them to provide a written statement of the mortgage interest and property taxes you paid. You can use this statement to report the amounts on your tax return. The IRS will still receive the lender's copy, so if the amounts differ significantly, you may want to file an amended return once you receive the official 1098.

If you refinanced during the year, you may receive two 1098 forms — one from your original lender for the months before refinancing, and one from your new lender for the months after. Both are correct; you report the amounts from both on your tax return.

Errors on your 1098 and how to correct them

If the amounts on your 1098 do not match your records, contact your lender first. Common errors include miscalculated interest, incorrect property tax amounts, or wrong loan information. The lender can issue a corrected form (called a Form 1098-C) if needed.

If you believe an error exists but your lender disagrees, you can still file your return using the amounts you believe are correct. Keep your own documentation — payment records, tax bills, loan statements — to support your numbers. If the IRS questions the discrepancy, you will have evidence to back up your position.

Do not ignore a 1098 that seems wrong. The IRS receives the same form your lender sends you, so if your return shows different numbers without explanation, it may trigger a notice or audit.

Frequently Asked Questions

Do I have to itemize deductions if I receive a 1098?

No. Receiving a 1098 does not require you to itemize. You can choose to take the standard deduction instead if it results in a larger deduction. Compare the two amounts and use whichever is higher for your situation.

What if I paid off my mortgage during the year?

Your 1098 will show only the interest and taxes paid through the month you paid off the loan. If you paid it off in June, the form covers January through June only. You report those amounts on your tax return for that year.

Can I deduct property taxes if they do not appear on my 1098?

Yes, if you paid them directly to your county or municipality. You report them separately on Schedule A using your own records or the tax bill from your assessor. The $10,000 cap on property tax deductions applies to all property taxes you paid, whether they appear on a 1098 or not.

Why does my 1098 show a different amount than my monthly mortgage statement?

Your monthly statement shows only that month's interest and taxes. Your 1098 totals all 12 months of the year. If you made extra payments or changed your payment amount during the year, the annual total will differ from any single month's statement.

What if I received a 1098 but my lender says I should not have?

If you received a 1098, the lender determined you paid at least $600 in mortgage interest that year. Use the form to report your deductions. If you believe the amount is wrong, contact the lender to verify, but do not ignore the form just because the lender later questions it.