Anyone paying mortgage interest receives this statement from their lender, and it is the document the deduction is built on.
It is straightforward until something ordinary happens to the loan: it is sold, refinanced part way through the year, or split across lenders. Then the figures arrive in pieces and need reconciling before they are used.
This covers who issues it, what each box reports, when it arrives, how borrowers use it, what to do when the loan changed hands during the year, and how to handle a figure that looks wrong.
What Is Form 1098?
IRS Form 1098, Mortgage Interest Statement, is filed by mortgage lenders (banks, credit unions, mortgage servicers) when they receive $600 or more in mortgage interest from a borrower during the tax year. Borrowers use it to claim the mortgage interest deduction on Schedule A of Form 1040.
Check the figures against your own records before using them, and resolve any difference with the lender at the time rather than at filing. Keep it with the closing documents for the property, because together they are what evidences the position if it is ever questioned.
Ankit Sarawagi, CPA, CA, MBA · LinkedInWho Files Form 1098?
The lender (or servicer) files Form 1098 with the IRS and provides a copy to the borrower. As a borrower, you receive Form 1098, you do not file it yourself. However, if you are a lender who received $600 or more in mortgage interest (e.g., you hold a private mortgage on property you sold), you must issue Form 1098 to the borrower and file it with the IRS.
Key Boxes on Form 1098
| Box | What It Reports |
|---|---|
| Box 1, Mortgage interest received | Total mortgage interest paid during the year |
| Box 2, Outstanding mortgage principal | Principal balance as of January 1 of the tax year |
| Box 3, Mortgage origination date | Date the mortgage was originated |
| Box 4, Refund of overpaid interest | Refunds of interest overpaid in prior years |
| Box 5, Mortgage insurance premiums | PMI or MIP paid during the year (deductibility subject to income limits) |
| Box 7, Is address of property securing mortgage the same as payer's? | Address confirmation |
| Box 8, Address of property securing mortgage | Property address if different from Box 7 |
| Box 10, Other (real estate taxes) | Real estate taxes paid from an escrow account |
| Box 11, Mortgage acquisition date | Date lender acquired the mortgage if after origination |
Due Dates
| Recipient | Deadline |
|---|---|
| Borrower (copy B) | January 31 of the following year |
| IRS (paper filing) | February 28 of the following year |
| IRS (e-filing) | March 31 of the following year |
How Borrowers Use Form 1098
As a borrower, you use the information from Form 1098 to claim:
- Mortgage interest deduction on Schedule A (itemized deductions), Box 1.
- Real estate taxes paid through escrow, Box 10 (subject to the $10,000 SALT cap).
- Potentially mortgage insurance premium deduction, Box 5 (if currently deductible).
Pro Tip: You can only deduct mortgage interest on your primary residence and one additional qualified home. Interest on mortgages over $750,000 (for loans taken after December 15, 2017) is limited.
What If You Have Multiple Lenders or Your Loan Was Sold?
If your mortgage was sold to another servicer during the year, each servicer will issue a separate Form 1098 for the period they held the loan. Add up all Forms 1098 for the same property to get your total deductible interest.
E-Filing Threshold
Lenders filing 10 or more information returns (combined, all types) in a calendar year are generally required to file electronically.
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Frequently Asked Questions
I did not receive a Form 1098 from my lender. Can I still deduct mortgage interest?
Yes. If you paid mortgage interest but did not receive Form 1098 (for example, the lender is an individual), you can still deduct it. You will need the lender's name, address, TIN, and records of payments made.
Does Form 1098 need to be attached to my tax return?
No. Keep it for your records. If you are filing electronically, it is not attached. If filing paper, it is not required as an attachment, just use the numbers on Schedule A.
What if the amount on my Form 1098 is wrong?
Contact your lender or servicer immediately to request a corrected Form 1098. Use the corrected amount on your tax return.
What is Points on Form 1098?
Box 6 reports mortgage points paid. Points paid on a primary home purchase may be fully deductible in the year paid; points paid on a refinance are generally deducted over the life of the loan.
What should the borrower do with the form when it arrives?
Check it against your own records before using it, then keep it with the supporting documents for the year. The figures on it drive what you may be able to claim, so a discrepancy is worth resolving with the lender at the time rather than at filing. Keep it with the closing documents for the property, since together they are what evidences the position if it is ever questioned.
Written by
Ankit Sarawagi, CPA, CA, MBA
Ankit leads the finance team at Profitjets, where he has worked with 500+ businesses across the US on bookkeeping, tax and CFO-level strategy. He writes about the habits that keep small business books accurate all year. Connect on LinkedIn
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