Form 1098: How to file and deduct mortgage interest (and other payments)

Written by  Andrew Coleman, CPA

Last updated Feb 12, 2026

As a US expat, you may have questions about this important tax form and how it affects your taxes.

Don't worry, we're here to help!

What is Form 1098: Mortgage Interest Statement

Form 1098 is an information return your mortgage lender files to report mortgage interest (and certain related amounts) it received from you. You typically get a copy for your records.

The form itself has several boxes that report different pieces of information, including the amount of mortgage interest paid, the loan balance, and the lender's information.

NOTE! You can only deduct mortgage interest that you paid during the tax year, and only if you itemize your deductions on your tax return.

Now, you might be wondering why mortgage interest is even deductible in the first place. Well, it's because the US tax code incentivizes home ownership by allowing taxpayers to deduct the interest they pay on their mortgage.

This can help reduce your overall tax liability and put more money back in your pocket.

How does Form 1098 affect my taxes?

Now that we've got the basics of Form 1098 down, let's talk about how it affects your taxes.

If you're a homeowner with a mortgage on your property, you'll likely receive this form from your lender. Basically, Form 1098 tells you how much mortgage interest you paid during the year.

And guess what? You can use that information to lower your tax bill!

Here's how it works: the mortgage interest deduction is one of those tax perks that you can use to reduce your taxable income. But hold your horses, you can only use it if it makes sense to itemize your deductions instead of taking the standard deduction.

Standard deduction amounts change each year. For 2025 returns filed in 2026, the standard deduction is:

• $15,750 (single or married filing separately),
• $31,500 (married filing jointly or qualifying surviving spouse),
• $23,625 (head of household).

If your itemized deductions are less than your standard deduction, itemizing usually won’t help.

So, if your total itemized deductions, including mortgage interest, are less than the standard deduction, it may not make sense to itemize. But if your itemized deductions add up to more than the standard deduction, then go ahead and itemize to get the most tax benefits.

But wait, there's more! There are limits to the mortgage interest deduction that you should keep in mind. 

Mortgage interest is generally limited to interest on qualifying ‘acquisition indebtedness’ up to the applicable cap (commonly $750,000 for mortgages taken out after Dec 15, 2017, and $1,000,000 for certain older mortgages), subject to detailed IRS rules and exceptions.

One more thing: if you're subject to the alternative minimum tax (AMT), you may not be able to take the full amount of the mortgage interest deduction. AMT can change how some deductions work, but home mortgage interest on debt used to buy, build, or substantially improve a qualified home is generally allowed. Interest on home equity debt may be limited - especially if the loan proceeds weren’t used to buy, build, or substantially improve the home.

Who can file Form 1098?

You don’t file Form 1098 as the borrower. If you paid $600 or more of mortgage interest during the year, your lender typically must file Form 1098 with the IRS and provide you an information copy.

But don't start celebrating just yet. It's important to know that not all mortgages are eligible for the mortgage interest deduction. You can only qualify if you've got a secured debt on a qualified home, which is just fancy tax talk for your primary residence or a second home.

This could be a first or second mortgage, home equity loan, or even a line of credit.

Pro Tip. And here's a fun fact for all you US expats out there: even if you have a mortgage on a property outside the US, you may still be eligible for the mortgage interest deduction, as long as the property is considered a qualified home under IRS rules.

So, who's responsible for filing Form 1098? Well, that falls on a lender, so your main job as the borrower is to make sure to receive the form and report the information accurately on your tax return. 

NOTE! If you take the standard deduction, you generally don’t report mortgage interest anywhere on your return - you just keep Form 1098 for your records. You use it when you itemize deductions on Schedule A.

How to file Form 1098: Mortgage Interest Deduction? 

Form 1098 is issued by your lender. You don’t “fill it out” - you use it to prepare your return (usually Schedule A) if you itemize.

Key boxes include:

Box 1 - Mortgage interest received: Interest your lender received from you during the year (with special rules for prepaid interest).

Box 2 - Outstanding mortgage principal: Principal balance information as defined on the form instructions.

Box 3 - Mortgage origination date: When the mortgage was originated.

Box 4 - Refund of overpaid interest: Do not deduct this; if you itemized in the year(s) you originally paid it, you may need to include some/all as income under the tax benefit rule.

Box 5 - Mortgage insurance premiums: If an amount is shown, it may qualify to be treated as deductible mortgage interest—confirm using the current Schedule A instructions and Pub. 936.

Box 6 - Points paid on purchase of principal residence: Points you (or the seller, in certain cases) paid that are required to be reported; points may be deductible, subject to the rules.

Box 7-8 - Property address/description: Where the secured property is shown.

Box 9 - Number of properties securing the mortgage (if more than one).

Box 10 - Other: Lenders may use this for other info (for example, amounts paid from escrow).

Box 11 - Mortgage acquisition date (if the lender acquired the mortgage in the year).

You generally don’t attach Form 1098 to your return. If you itemize, you use it to enter deductible mortgage interest (and deductible points, if applicable) on Schedule A.

bonus - How do I get my 1098 mortgage form?

Enjoy!

Deducting mortgage interest using Form 1098

The mortgage interest deduction is a valuable tax break for homeowners that allows you to deduct the interest you pay on your mortgage loan. This can help lower your taxable income and reduce the amount of taxes you owe to the IRS.

To claim the mortgage interest deduction, you'll need to itemize your deductions on Schedule A of your tax return. You'll also need to meet certain requirements, such as having a secured debt on a qualified home and using the loan to buy, build, or improve your main home or a second home.

NOTE! Keep in mind that the mortgage interest deduction has undergone some changes in recent years, so it's important to consult with a tax professional for the most up-to-date information on eligibility and limitations.

Other 1098 tax forms

While Form 1098 is most commonly used for reporting mortgage interest, there are other types of 1098 tax forms that serve different purposes. These include:

• Form 1098-C: This form is used to report charitable contributions of motor vehicles, boats, and airplanes. If you donated one of these items to a qualified organization, you may be able to deduct the fair market value of the donation on your taxes.
• Form 1098-E: If you paid $600 or more in interest on a student loan during the year, your lender is required to send you a Form 1098-E. You may be able to deduct this interest on your taxes, up to a maximum of $2,500.
• Form 1098-T: This form is used to report tuition payments and other educational expenses. If you paid tuition for yourself or a dependent during the year, you may be eligible for education-related tax credits or deductions.

NOTE! Each of these forms has its own set of requirements and instructions, so be sure to familiarize yourself with the specifics if you need to file them.

Pro Tip. Be sure to keep track of any relevant expenses and consult with a tax professional to ensure that you're filing the correct forms and taking advantage of all available deductions and credits.

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