1098 form

You will generally receive a Form 1098 from the first lender to whom you paid points and prepaid interest. Contact the lender if you don't receive one by early February. You should report the amounts paid to both lenders.

Generally, the Internal Revenue Service (IRS) allows you to deduct the full amount of your points in the year you pay them. If the amount you borrow to buy your home exceeds $750,000 million ($1M for mortgages originated before December 15, 2017), you are generally limited on the amount of points that you can deduct. The IRS also imposes the following requirements to deduct mortgage points:

• The mortgage must be used to buy or build your primary residence
• The points must be a percentage of your mortgage amount
• The use of points must be a normal business practice in your area
• The amount of points paid must not be excessive for your area
• You must use cash accounting on your taxes
• The points must not be used for items that are typically stand-alone fees, such as property taxes
• You cannot have borrowed the funds to pay for the points from the mortgage lender or broker
• The amount you pay must be clearly itemized as points on your loan documents

If you aren't able to deduct your points in the year you pay them, you may still qualify to deduct them over the life of the loan.

Mortgage points are considered an itemized deduction and are claimed on Schedule A of Form 1040. Here are the specifics:

• Usually, your lender will send you Form 1098, showing how much you paid in mortgage points and mortgage interest during the year
• Transfer this amount to line 8a of Form 1040 Schedule A
• If any of your points were not included on Form 1098, enter the additional amount you paid on line 8c of Form 1040 Schedule A

See this TurboTax Tips Article for more information on this topic.

If you receive two forms 1098, you can add the second form 1098 by following these steps:

• In TurboTax Online, open your return and click on Federal Taxes then on Deductions & Credits
• Click Edit/Add next to Mortgage Interest, Refinancing, and Insurance
• On the Mortgage deduction summary page, click on Add a Lender and follow the prompts.

[Edited 01/21/24| 12:38pm PST]

@Ajones8726 (edited)