topic Over $5000 refinance cost only result in $100 reduction in tax due? in Deductions & credits

Over $5000 refinance cost only result in $100 reduction in tax due?

tianwaifeixian — Mon, 09 Mar 2026 05:18:48 GMT

I did a refinance on my rental property, total cost I entered is over $5000, but when I moved to the next step, I only see about $100 deduction on my tax due amount. Did I do anything wrong?

After I moved to the next step, I see this:

It looks like the full amount will be deducted over time. Here are my two questions:

1. Anyway it can be fully deducted in one year?

2. Now should I include the original loan (when I purchase the house 3 years ago) here as the "prior refinance fee"? I am assuming the cost of that loan is also deducted over the life of that loan?

Thank you!

Re: Over $5000 refinance cost only result in $100 reduction in tax due?

ThomasM125 — Tue, 22 Feb 2022 03:26:32 GMT

There is no way you can deduct the refinance fees in one year, as they apply to the life of the loan.

No, the original loan is not deductible as a prior refinance fee, just the remaining, unamortized balance of finance fees that you amortized on the original loan would be entered as the prior refinance fee.

Re: Over $5000 refinance cost only result in $100 reduction in tax due?

tianwaifeixian — Tue, 22 Feb 2022 13:33:12 GMT

Thanks. That is what I thought as well. To make sure I understand what you said: say, 3 years ago, I paid $4500 for the original loan when I purchased the house. $300 is being deducted since that year. I can claim $4500-$300*3=$3600 as the previous refinance fee this year. Is that correct?

And, based on this year's comments that I saw on TT, it says it will keep track of this. I am assuming TT will automatically show the amount? But when I clicked "I have prior refinance fees let's take care of now" option, it didn't give me a number. Instead, it ask me to enter the info. How can I find out how much I should enter here?

Thank you!

Re: Over $5000 refinance cost only result in $100 reduction in tax due?

Vanessa A — Tue, 22 Feb 2022 14:18:33 GMT

Yes, that is correct. If you had an original finance cost of $4,500 and you were deducting $300 per year for 3 years, then your remaining balance would be $3,600. So, in this situation you would enter $3,600 for the prior finance fees.

Re: Over $5000 refinance cost only result in $100 reduction in tax due?

tianwaifeixian — Tue, 22 Feb 2022 16:19:20 GMT

Thank you! Do you know how to figure out how much has been deducted in the last 3 years in TT? Have no clue on how to find that number in TT

Re: Over $5000 refinance cost only result in $100 reduction in tax due?

ThomasM125 — Tue, 22 Feb 2022 17:23:33 GMT

The amortized finance costs would normally appear on line 19 of your schedule E and be called amortization expense. You may also see them on form 4562, depreciation schedule, on line 42 to 44.