The mortgage interest deduction has NOTHING to do with the Form W-2.

Mortgage interest paid is reported to the IRS and to you on Form 1098. Usually, the bank also puts what was paid in real estate tax as well.

Now, if you asking if you can deduct mortgage interest without any W-2 income, the answer s yes if you have OTHER taxable income, such as self-employment income, dividends, interest earned, farm income or capital gains from the sale of a stock or some other property.

However, if you have NO income, then the mortgage interest deduction is WASTED, because there is NO income to offset and thus NO tax savings.

Further, if the mortgage interest, when totaled with the rest of the itemized deductions, is LESS than the standard deduction ($5,700 for a single person or $11,400 for a joint return), then the mortgage interest deduction is also wasted, because ANY couple who files jointly AUTOMATICALLY gets the $11,400 standard deduction.

I have found this to happen more and more frequently with my clients when they retire and the ONLY itemized deduction they have is mortgage interest, which, towards the end of a 30-year mortgage, is often less than $5,000.