Date of Purchase of Home vs Date of refinance.

[castell9000]

I purchased my home in 2016, and I  refinanced  the loan with the same Bank in 2021. When I enter my mortgage interest data, I am entering the date of mortgage origination date which on Form 1098 is 2/10/21. Since I owe more than $750K on my home, I am unable to get any benefit from taxes paid. We have the same lender refinance our mortgage. Can I use my date of sale which is 2016 and get the benefit of itemized deductions. 

[Cynthiad66]

Honestly, the loan origination date is not the purchase date.  So this loan was obtained in 2021  The laws changed for that also. 

From the IRS: Refinanced home acquisition debt. "Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt."

The personal exemption put in place by the TCJA has risen for tax year 2022 to $25,900 for married couples filing jointly. This increased standard deduction may or may not make it worth your while to itemize your return to get the break the mortgage interest deduction can bring. 

As has been the case last year, TCJA made things a bit more complicated as there is also a $10,000 limit on deducting State and Local Taxes (SALT, which of course includes income and property taxes).

If the total of the two (plus any other itemizable deductions you may have) total more than $25,900 ($12,950 for a single filer), it's probably worth it to itemize your return, but there's no simple answer as to whether it is or isn't.

Home Mortgage interest Deduction