If you’ve paid interest on a mortgage during the tax year, you may be eligible to claim a deduction using the mortgage tax form known as Form 1098. This form, officially titled the Mortgage Interest Statement, is issued by your lender and reports the amount of mortgage interest and points you paid.
Where to Report Mortgage Interest
The way you report mortgage interest on your tax return depends on how the property was used:
Main Home – Itemized Deduction
If the mortgage interest is for your primary residence, you can claim it as an itemized deduction. This is done using the 1098 form mortgage interest deduction process:
Program Entry:
- Go to the Federal Section
- Select Deductions > Select my forms
- Choose Itemized Deductions
- Click on Mortgage Interest and Expenses
This is where you’ll enter the information from your mortgage interest paid tax form (Form 1098).
Rental Property – Schedule E
If the mortgage interest is for a rental property, it should be reported as an expense on Schedule E:
Program Entry:
- Go to the Federal Section
- Select Income
- Choose Profit or Loss from Rentals and Royalties
- Enter under Expenses > Mortgage Interest
Part-Year Use: Personal and Rental
If you lived in the home for part of the year and then converted it to a rental, you must allocate the mortgage interest between personal and rental use. You cannot claim the same interest on both Schedule A (itemized deductions) and Schedule E (rental expenses).
How do I report my mortgage interest and points?
The tax form for interest paid on mortgage, Form 1098, is typically issued by your mortgage lender. It includes:
- Total mortgage interest paid
- Points paid on the loan
- Refunds of overpaid interest (if any)
* If the form shows a refund of overpaid interest, do not reduce your deduction. Instead, report the refund as other income.