Mortgage points paid

Forum|Forum|4 years ago
March 7, 2022
1 reply
4 views

We refinanced out mortgage in 2021 and paid over $6000 in points, we did not make an interest payment until 2022, how can i claim the points as a deduction for this year i dont have a 1098 statement from the current lender

bosso3

Level 7

I suggest that you refer to https://www.irs.gov/instructions/i1040sca 2021 Instructions for Schedule A. Pay particular attention to instructions for Lines 8a - 8d. Instructions for line 8c state: "Points are shown on your settlement statement. Points you paid only to borrow money are generally deductible over the life of the loan. See Pub. 936 to figure the amount you can deduct. " Points are discussed beginning on page 5.

To enter this in TurboTax, click on the "Search" link in the upper right corner, next to the magnifying glass.

Type "Mortgage interest statement" in the text entry box.

Click on the link "Jump to Mortgage interest statement"

Follow the steps and instruction in that TurboTax conversation.

RaifH

Level 10

In the case of a refinance, your points are deducted over the life of the loan, as @bosso3 said. If you paid $6,000 in points and your mortgage is 30 years, you will be able to deduct about $200 per year for the points paid.

Points paid in a refinance must be deducted over the life of the loan. The only exception is if you refinanced and used a portion of the proceeds to improve your home. In that case, you can deduct the points in the year paid for that portion of the mortgage.

TurboTax will automatically calculate the correct deduction based on the points paid and the length of the loan.