Deductions & credits
You mean Box 6 on Form 1098, not 1096, right? You can enter Box 6 info when you enter the 1098. After you enter the details (except Box 6), the next page asks about points, see image below. When itemizing deductions, remember the there are ceilings and floors for many of the deductions you mentioned. The total of the deductible portion of each must be greater than your standard deduction. To see the details of your itemized deduction amount, see Schedule A.
You can deduct points for your main home, if all of the following conditions apply:
- They're discount points (see the definition)
- The mortgage is used to buy, build, or improve the home, and the home is the collateral for the loan
- Paying mortgage points is a customary practice in your area and the points you paid aren't excessive for your neighborhood
- The points were paid directly to the lender, either by you or the seller (no borrowing)
- Your down payment, plus any points the seller paid, exceed the points paid amount
- You use the cash method of accounting (almost all taxpayers do)
- The points are calculated as a percentage of the mortgage principal (not required on home-improvement loans)
- The points are clearly itemized on your settlement statement as points (not required on home-improvement loans)
If you meet all the above criteria, you can either deduct all your points in the year you paid them or deduct them in equal increments over the life of the loan. Either way, you'll need to itemize to get the deduction.
The deduction for mortgage interest is capped at $750,000 of debt. Interest on up to $1 million of acquisition debt for loans prior to December 15, 2017 is grandfathered.
Are points deductible on a second home and refinances?
Are points deductible on a rental property?
Related Information:
- I refinanced my home, what can I deduct?
- What are points?
- I bought a house, what can I deduct?
- Where do I enter my 1098 mortgage interest statement?
- What kinds of refinancing costs can I deduct?
