For your primary or secondary home, the only deductible closing costs are home mortgage interest and certain real estate taxes. These deductible costs generally include:
- Real estate taxes paid at closing
- Mortgage interest paid when the cost was settled
- Interest paid at the house’s purchase
- Loan origination fees, known as “points”
You can add other settlement fees or closing costs to the basis of your property. This way you’ll get credit for those costs when you sell the home. These base adjustments include:
- Abstract fees
- Charges for installing utility services
- Legal fees
- Recording fees
- Surveys
- Transfer taxes
- Title insurance
- Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions
To deduct your mortgage closing costs in TurboTax, go to the Deductions & Credits section of your federal return and select Start next to Mortgage Interest and Refinancing (Form 1098). Or you can try the instructions below. If you have multiple 1098 forms due to refinancing, ensure they’re first entered correctly.
Enter your 1098 (Mortgage Interest Statement):
- Open your return.
- Enter 1098 in the Search box.
- Click on jump to 1098z link.
- Enter information from your Form 1098.
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