Closing costs, including appraisal fees are not tax deductible but may increase the cost basis of your home which may benefit you in the event of sale. Other non deductible closing costs are:
- Attorney fees in connection with obtaining property
- State stamp taxes and transfer taxes
- Tax service fees
- Title policy fees or title insurance
- Miscellaneous abstracts of title, surveys, recording of deed
However, for a new loan or refinance, mortgage interest paid (including origination fee or "points"), real estate taxes, and private mortgage insurance (subject to limits) are deductible.
On a refinance, you may need to amortize an origination fee (if paid) over the life of the loan. TurboTax will walk you through this process.
Enter the above expenses in the following areas:
Mortgage interest paid: Federal Taxes>Deductions &Credits> Your Home, select Mortgage Interest, Refinancing, and Insurance
Points (or Loan Origination Fee): Federal Taxes>Deductions &Credits> Your Home, select Mortgage Interest and Refinancing, and Insurance- (See Did you pay points in 2016 when you took out the loan?) page
Real Estate Taxes: Federal Taxes>Deductions &Credits> Your Home>Property Taxes
Mortgage Insurance: Federal Taxes>Deductions &Credits> Your Home> Mortgage Interest, Refinancing, and Insurance
Some of the above expenses may be designated on your HUD-1 settlement statement.