While you generally may not deduct in full points for a refinance, if you use part of the proceeds to improve your main home and meet other tests, you can fully deduct the part of the points relating to the funds used for the improvement. See IRS Pub 936 under Deduction Allowed in Year Paid.
If you can't deduct the refinance points in the first year, enter the amount with the new mortgage and TurboTax will track the amortization of points on the Home Mortgage Interest Worksheet, Line 10c (one worksheet for each mortgage). Total points for the year are the sum of all amortization costs for all eligible mortgages, as shown on the Deductible Home Mortgage Worksheet, Line 25.
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