To enter mortgage interest:

1. From within your TaxACT return (Online or Desktop) click on the Federal Q&A tab
2. Click Itemized or Standard Deductions to expand the section, then click Interest expenses
3. Click Yes to enter information from Form 1098

Per IRS Publication 17 Your Federal Income Tax (For Individuals), page 154:

Amount Deductible

In most cases, you can deduct all of your home mortgage interest. How much you can deduct depends on the date of the mortgage, the amount of the mortgage, and how you use the mortgage proceeds. 

Fully deductible interest.

If all of your mortgages fit into one or more of the following three categories at all times during the year, you can deduct all of the interest on those mortgages. (If any one mortgage fits into more than one category, add the debt that fits in each category to your other debt in the same category.)

The three categories are as follows:

1. Mortgages you took out on or before October 13, 1987 (called grandfathered debt).
2. Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2013 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately).
3. Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2013 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2).

The dollar limits for the second and third categories apply to the combined mortgages on your main home and second home.

See Part II of IRS Publication 936 more detailed definitions of grandfathered, home acquisition and home equity debt.

You can use Figure 23-A (on page 155 of IRS Publication 17) to check whether your home mortgage interest is fully deductible.

Please note: You must be legally liable for the mortgage in order to deduct the mortgage interest.