How do I enter in closing costs for a house I bought in 2022?

[AMJP]

I bought a new home and TurboTax seems to not allow me to enter in that I have bought a new home last year. I am trying to enter in closing costs but it will not recognize and allow me to enter in the new home purchase. 

[HelenC12]

When you purchase a house as you personal residence or second home, you don't report the purchase on your income tax return. You add the closing costs to the basis of your property. You don't deduct them on your income tax return. 

The following items are other settlement fees or closing costs you may include in the basis of your property when you purchased it:

• Excise taxes
• Abstract fees (abstract of title fees); 
• Charges for installing utility services; 
• Legal fees (including title search and preparation of the sales contract and deed); 
• Recording fees;
•  Surveys; 
• Transfer taxes;
• Owner's title insurance.  

See IRS Publication 551, Basis of Assets, page 2 and 3, Real Property, Settlement costs, for additional information that may apply to your particular situation.,

If you just bought a house, you may be able to deduct:

• Mortgage interest (including points)
• Property (real estate) tax
• Mortgage insurance (PMI or MIP)

Unless it's a rental, you won't be able to deduct homeowner's insurance, repairs, or home improvements. Also, moving expenses are no longer deductible for most taxpayers.

Be sure to hold onto your closing statement, as it lists expenses that could be deductible, like points and prepaid interest.

Also, start saving your home improvement receipts. You won't be able to deduct those right now, but they can reduce your gain (along with any capital gains tax) when you sell in the future.

[Carl]

If the home was purchased as your primary residence, 2nd home, vacation home or any other type of personal use, the only deductible expenses are mortgage interest and property taxes. That's it. They will be SCH A itemized deductions. So if the total of all of your SCH A itemized deductions do not exceed your standard deduction, it will make no difference in your total tax liability for the tax year.

[xmasbaby0]

There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.

Buying a home is not a guarantee of a big refund.  Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home 

ownership deductions.

Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees.  There are no deductions for appraisal, inspections, title searches, settlement fees. etc.

Your down payment is not deductible.

Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.

Home improvements, repairs, maintenance, etc. for your own home are not deductible.  

Homeowners Association  (HOA) fees for your own home are not deductible.

Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, and loan origination fees (“points”) that you paid in 2022.  You should have a 1098 from your mortgage lender that shows this information.  Lenders send these in January/early February.

It is very hard for a lot of people to use itemized deductions now that the standard deduction is so much higher.  Your home ownership may not have any effect on your tax due or refund, especially if you purchased the house late in the year.  

Standard Deduction
Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes. 

2022 STANDARD DEDUCTION AMOUNTS

SINGLE $12,950  (65 or older + $1750)

MARRIED FILING SEPARATELY $12,950  (65 or older + $1750)

MARRIED FILING JOINTLY $25,900  (65 or older + $1400 per spouse)

HEAD OF HOUSEHOLD  $19,400  (65 or older +$1750)

Legally Blind + $1750