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First, you can only deduct the points you actually paid, after taking into account the lender discount. For example, if your points were $2000, and your other closing costs were $1000, and you received a $1500 discount from the lender, then your points deduction is $1500.
Second, on a refinance, you can only deduct your points spread out over the life of the loan. (For a 30 year mortgage that is 360 months, so you would divide the points by 360 and multiply by the number of payments you made in the tax year you are filing for.) If you used part of the proceeds to improve or rebuild your home, those points can be deducted all at once on a percentage basis. (Again, if you have $1500 of deductible points and half the proceeds were used for remodeling, you can deduct $750 this year and the other $750 over the life of the loan.) Turbotax should take care of this calculation for you in most cases.
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