Hi
I am entering my 1098 form details in mortgage section.
I get to the part where it asks me this question-
"Did you pay points in 2022 when you took out the loan?" I see two options-
1. "We paid points when we refinanced, purchased a second home, or opened a home equity loan in 2022."
2. "We have already deducted all the points we paid in 2022, or we didn't pay any points."
Now, I did pay discount points to secure my interest rate for 6 months in 2022. But none of these options make sense. 1. looks correct except it says "second " home or home "equity" loan. Both does not seem right.
If I choose 1 anyway, I see this "Is this 1098 the most recent for your loan?" What would be the answer to this? Is it asking about 2023's 1098 form or 2022's 1098 form (which has details on points I paid for obvious reasons)?
Then, finally after answering other questions I get to "Your mortgage interest is being limited". I think I understand this part - since my loan is 1M, some maths is happening and letting me use portion of the interests for tax savings. I also see something called "Points not on a 1098". What is that? Website does not explain.
Interesting part is- If I dont choose any option on this question- "Did you pay points in 2022 when you took out the loan?" I am getting a bigger tax refund. None of this is making sense to me.
I also would like to know how these points are going to be used. I took loan in 2022 so how can I use those points for some tax benefit now? I did try to use Itemized deduction last year but it did not come close to standard deduction so did not use it.
P.S. This is my first and primary house.
