I received Form 1098 from my lender which shows the interest paid and points paid on purchase. I was able to deduct those. But what about my closing costs I paid when I bought the house? Where do I deduct closing costs when filing taxes?I paid over $6000 in closing costs. Aren't those deductible?Also I paid about $2300 in Mortgage Insurance Premiums. When I added that to my deductions it did not increase my refund. Why? Shouldn't I be getting tax benefits for paying Mortgage Insurance Premiums?
For a primary home mortgage loans, the deductions available to you are to: interest, property taxes paid, mortgage insurance premiums, and points. Look for these on your closing documents in addition to any reported on a 1098 form.
Mortgage Insurance Premiums - These are deductible over an 84 month period. Ex: If you paid $2300 when you closed your home in July, your deduction would be ($2300/84) x 6 months = $164.29. This write-off phases out as adjusted gross income increases above $50,000 on married filing separate returns and above $100,000 on all other returns. Your income may be why you are not seeing an increase to your refund.
Other fees, such as commissions, attorney fees, preparation of deed, abstract fees, owner title insurance, recording fees are added to the basis of your home, and not deductible. An increase in basis means that less gain will be calculated. These costs come into play when you sell your home.