Remember that on a refinance, you must spread the points out over the life of the loan. In other words, for a 30 year mortgage, you can only deduct 1/360 of the points for each payment you made in 2021. You would then deduct 12/360 of the points you paid in 2022, and so on. If you are currently spreading your points out on a previous loan, and you refinance with a different lender, you may then deduct the remaining points when you pay off that mortgage. If you refinance with the same lender, you must add the old points to the new points and start spreading them out over the new loan.
If you did not deduct points in on your 2020 return you want to file an amended return, you should do that first. When you enter the 1098 for mortgage interest, TurboTax will ask you if this is a new or refinanced loan, if you paid points, and if you are spreading out the points. TurboTax should calculate the points for you, but you should verify the calculation by examining your schedule A before you file. On your 2020 return, you will only claim a few dollars of points for the refinance in 2020. For example, if you refinanced in June and your first payment was August, you could claim 5/360 of your points as a deduction.
then when you prepare your 2021 return, you will have two 1098‘s to enter, one for the previous loan that you paid off and one for the new loan. TurboTax shit again asked you if you were paying points, if you were spreading out the points, and how much points were left over. If you refinanced with a new lender, you can deduct the remaining points from the old loan, plus a fraction of the points on the new loan.
