Box 10 on Form 1098 is an optional “Other” field your mortgage lender can use to report miscellaneous amounts tied to your loan, most often the real estate taxes or insurance premiums paid from your escrow account during the year. Whether the number is deductible depends entirely on what it represents. Some entries belong on Schedule A, some do not, and a few require you to dig into your escrow statement before you can tell the difference.
What Your Lender Puts There
The IRS instructions let a lender enter “any other item you wish to report to the payer, such as real estate taxes, insurance paid from escrow.”1Internal Revenue Service. Instructions for Form 1098 Reporting in Box 10 is discretionary. Form 1098 itself tells borrowers the interest recipient “may use this box to give you other information.”2Internal Revenue Service. Form 1098 – Mortgage Interest Statement Two borrowers with identical mortgages at different servicers can see completely different things there. A blank box is not a missed deduction. It just means the lender chose not to use the field.
Real Estate Taxes Paid From Escrow
The most common entry is the total property tax your lender disbursed from escrow during the year. That figure reflects what actually left the account, not what you deposited into it. Escrow balances carry over, get adjusted mid-year, and cover payments that straddle calendar years, so the number in Box 10 often will not match your monthly escrow contributions. Before you claim it, compare it to the year-end escrow statement, which shows every disbursement individually.
Insurance Paid From Escrow
Homeowners insurance premiums sometimes show up in Box 10 as well.1Internal Revenue Service. Instructions for Form 1098 This one is a trap. Homeowners insurance on a personal residence is not deductible. The lender reports it for your records, not for your return. If Box 10 combines taxes and insurance into a single number without breaking them out, the escrow statement is what lets you isolate the deductible portion.
Late Payment Charges
A late fee on your mortgage can count as deductible home mortgage interest, but only when the charge is a flat penalty for paying late rather than a fee tied to a specific service (like an inspection triggered by delinquency).3Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction If a qualifying late charge shows up in Box 10 instead of Box 1, add it to your mortgage interest total.
What Stays Off Your Return
Because Box 10 is informational, lenders sometimes report amounts there that have no tax benefit. Knowing what to ignore matters as much as knowing what to claim.
- Homeowners insurance premiums: a personal living expense, not deductible.
- HOA fees or condo assessments: personal expenses for a primary residence or second home, not deductible wherever they appear.
- Non-interest servicing fees: administrative charges, document fees, or fees for specific services are not mortgage interest and do not qualify.
If you see a number in Box 10 and cannot tell what it covers, do not claim a deduction on it. A number claimed without documentation of what it represents will not survive an audit.
The SALT Cap on the Property Tax Portion
Even when Box 10 contains a legitimate, fully deductible property tax figure, there is a ceiling. The state and local tax deduction caps the combined total of state income (or sales) taxes, local income taxes, and real property taxes. For 2026, the cap is $40,400 for most filers and $20,200 for married couples filing separately, rising 1% each year through 2029.4Internal Revenue Service. Topic No. 503, Deductible Taxes
If your state income tax alone already fills that cap, the property tax number in Box 10 buys you nothing further. In high-tax areas, this is where the math tightens: Box 10 might show $12,000 in real estate taxes, but if the SALT ceiling is already reached, none of that $12,000 reduces your taxable income. High-income filers face an additional phasedown. The $40,400 cap drops by 30% of modified adjusted gross income above roughly $505,000 for joint filers, though it cannot fall below $10,000.
Where Each Piece Goes on Schedule A
You cannot enter the Box 10 total on a single line. It has to be broken apart by what it represents, with each piece routed to the right section.
- Real estate taxes: add the property tax portion to your other state and local taxes and enter the total on the “Taxes You Paid” section of Schedule A (lines 5a through 5c), subject to the SALT cap.
- Deductible late charges: combine with the mortgage interest from Box 1 and any points from Box 2, then enter the total in the “Interest You Paid” section.3Internal Revenue Service. Publication 936 – Home Mortgage Interest Deduction
- Non-deductible items: homeowners insurance, HOA fees, and servicing charges stay off the return entirely.
All of this assumes you itemize. If your total itemized deductions do not exceed your standard deduction, Box 10 is informational for you no matter what it contains.
What to Do When Box 10 Has No Explanation
A number in Box 10 with no context is useless for tax purposes. You cannot guess and deduct based on the guess. If nothing on the form or in an accompanying statement explains the amount, call your mortgage servicer and ask for a written breakdown showing whether it covers property taxes, insurance, late charges, or something else. Keep the response with your tax records. Your year-end escrow account statement is the strongest backup document, since it lists every disbursement the lender made on your behalf and identifies what each payment was for. If the IRS ever questions the deduction, that pairing (a written explanation from the servicer plus the escrow statement) is what supports the number you claimed.