Takeaways
- Banks and mortgage providers are responsible for sending you a Form 1098.
- Form 1098 shows the amount of mortgage interest paid during the year.
- The One Big Beautiful Bill extended mortgage interest deductions for taxpayers.
- Taxpayers can use Form 1098 to support their itemized deductions.
- Mortgage interest deductions can reduce your tax liability and increase your tax refund.
What Is Form 1098?
Form 1098 is an IRS tax form that reports how much mortgage interest you paid to your lender during the previous year. This includes interest on your mortgage for your primary residence, and in some cases, a second home.
Your lender uses this form to show the exact amount of mortgage interest you paid, along with certain related costs such as points paid at closing. You use this information to determine whether you can deduct those payments on your federal tax return.
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Who Receives a Form 1098?
If you paid $600 or more in mortgage interest during the year, your lender or mortgage provider must send you a Form 1098.[1] Most homeowners with a mortgage will receive one. Here is what the form typically includes:
- The total mortgage interest paid
- Points paid during the year
- Mortgage insurance premiums (in some cases)
- Information about the property securing the loan
You should receive your Form 1098 by the end of January each year. If you have multiple mortgages, you will receive a separate form for each loan.
Read More: What Is Private Mortgage Insurance (PMI)?
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2025 Rules for Deducting Mortgage Interest
Tax rules can change over time, so it is essential to know the current limits. For the 2025 tax year, the rules for deducting mortgage interest are consistent with those set after the 2017 Tax Cuts and Jobs Act. The One, Big, Beautiful Bill Act, signed into law on July 4, 2025, extended these deductions.
Like with most tax deductions, your tax filing status matters. Here are the current deduction amounts for 2025 [2]:
- You may deduct mortgage interest on the first $750,000 of mortgage indebtedness if you are married filing jointly.
- If you are married filing separately, the limit is $375,000.
- Mortgages taken out before December 15, 2017, may still qualify for the older $1 million limit.
The deduction applies to mortgages on your main home and a second home, as long as the loan is secured by the property. However, interest on home equity loans or lines of credit is only deductible if the funds were used to buy, build, or substantially improve the home.
Read More: Best Online Tax Software Programs
Example of Form 1098:
How Form 1098 Works
Form 1098 itself does not automatically provide you with a deduction. Instead, it gives you the numbers you need to decide whether to itemize deductions on Schedule A or take the standard deduction.
For many taxpayers, the standard deduction will be higher than their itemized deductions, meaning Form 1098 will not reduce their tax liability. But if you have high mortgage interest payments, along with other deductible expenses such as state and local taxes or charitable contributions, itemizing may save you money.
Who Files a Form 1098?
Technically, you do not file Form 1098 yourself. The responsibility rests with your lender or mortgage servicer. They submit the form to both you and the IRS to report how much interest you paid.
Your job as a homeowner is to review the form for accuracy. Mistakes could happen, especially if you refinanced or made significant changes to your mortgage during the year. If something looks off, contact your lender right away to request a correction.
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How to File a Form 1098
Although you do not file the form directly, you do use the information from it when preparing your tax return. Here are the steps:
- Gather your Form 1098 from each lender.
- Decide whether you will itemize deductions using Schedule A.
- Enter the mortgage interest and related expenses in the appropriate section of Schedule A.
- Keep the Form 1098 with your tax records in case the IRS requests proof.
Most online tax software programs will guide you through the process. It will also compare your itemized deductions to the standard deduction to see which option benefits you most.
Pros of Filing a Form 1098
There are several advantages to making use of Form 1098:
- Potential tax savings – The mortgage interest deduction can be one of the largest deductions available to homeowners.
- Encourages homeownership – This tax break reduces the overall cost of borrowing, making owning a home more attractive compared to renting.
- Accurate records – Form 1098 provides a clear summary of interest and related expenses, which can help you avoid errors when filing.
- Combined benefits – When added to other itemized deductions, Form 1098 can push your total above the standard deduction threshold, leading to additional savings (and maybe even a tax refund).
Read More: 6 Hidden Costs of Homeownership
Smart Summary
Form 1098 reports how much mortgage interest you paid during the year. However, you can only benefit from the deduction if you choose to itemize deductions on Schedule A instead of taking the standard deduction. You can consult a tax professional or use one of the best online tax software to help you optimize how to file your taxes this year. Here is our guide on which ones to use – Best Online Tax Software Programs.
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(1) Internal Revenue Service. About Form 1098, Mortgage Interest Statement. Last Accessed January 2, 2026.
(2) Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction. Last Accessed January 2, 2026.
