Deductibility of Mortgage Points and Float Down Fee

[MightyQuinn71]

I refinanced in 2020 (primary mortgage and variable rate HELOC refinanced into a single fixed-rate mortgage with my existing lender).

I'm trying to ascertain whether either/both of the following are deductible:

- Mortgage Points Paid

- Mortgage Float Down Fee (allowed me to potentially get a lower rate if interest rates continued to fall during the closing process).

Neither of the above were reported on my Form 1098s.

If either/both are deductible, do I need to recognize/record over the life of the loan as opposed to all at once for this year's taxes?

Thank you.

[Cynthiad66]

You can do either amortize the points or deduct them for 2020.  These deductions should be on the Form 1098.  Follow these instructions:

steps to enter your mortgage information:

1. Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender)
2. Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
3. Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage interest, these boxes will be blank on your forms and you won’t enter anything.)
4. Add the property tax paid from each form and enter it in the Property (real estate) taxes box.

Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.

What if I have more than two 1098s?

You should combine all of the 1098s directly related to the refinance and enter it as one 1098.  An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.

What if I paid points?

Points on Loans Paid Off in 2020: Enter the points on your 1098 you have started and mark you paid off the loan when promoted.

Points on Loans on New Loans: You will want to enter a separate 1098 to cover these points paid. When prompted, enter 0.00 for Boxes 1, 2, 5, and the Property (real estate) taxes box, and checkbox 7, as you’ve already entered the details on your first 1098. For Box 3, add the date in 2020 when the loan originated