Form 1098: How do I claim the Mortgage Interest Tax Deduction?

How you claim the Mortgage Interest Deduction on your tax return depends on the way the property was used.

1. If the Mortgage Interest is for your main home, you would enter the Mortgage Interest as an Itemized Deduction. The entry would be made by following these steps:
   • Federal Section
   • Deductions
   • Itemized Deductions
   • Mortgage Interest and Expenses
2. If you have Mortgage Interest for your rental home, you would enter the Mortgage Interest as an expense on your Schedule E. The entry would be made by following these steps:
   • Federal Section
   • Income
   • Profit or Loss from Rentals and Royalties (Schedule E)
   • Expenses
   • Mortgage Interest    

What if I lived in the home part of the year?

If you lived in the home for part of the year and then converted the home to a rental, you will need to allocate the Mortgage Interest and claim a portion in both areas of the return. The same Mortgage Interest cannot be claimed on both the Schedule A as an itemized deduction and Schedule E (or Schedule C) as a rental expense.

Where do I report my mortgage interest and points?

Home mortgage interest and points are generally reported to you on Form 1098, Mortgage Interest Statement, by the financial institution to which you made the payments for the current tax year. If this form shows any refund of overpaid interest, do not reduce your deduction by the refund. Instead, you generally report the amount of the refund as other income.

Additional Information:

• Schedule E Instructions
• Sample Form 1098
• Form 1098 Instructions