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raidola1
New Member

If I closed on my house in November 2021 but didn't make my first payment until Jan 2022, do I file my mortgage in my 2021 taxes?

 
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If I closed on my house in November 2021 but didn't make my first payment until Jan 2022, do I file my mortgage in my 2021 taxes?

You deduct interest on your mortgage in the year it was paid. 

If I closed on my house in November 2021 but didn't make my first payment until Jan 2022, do I file my mortgage in my 2021 taxes?

There are several tax items that might be includable on your 2021 return.

 

1. You can deduct the daily mortgage interest from the closing date to the end of the month, this will be shown on your closing statement.  You can deduct this interest even if it is not included on your 1098.  If you aren't sure if the daily interest at closing is included in your 1098, compare the interest on your monthly mortgage statements with your 1098.  You can enter this as mortgage interest not on a 1098 (there is a box to check for this) under the name of your closing bank instead of the name of the mortgage servicer, if they are different. 

2. You can deduct property taxes allocated to the days you owned the home.  For example, suppose the seller paid a full year of property taxes on January 15 that covered Jan 1-Dec 31, 2021.  If you bought the home on November 25, you owned the home for 36 days, so you could deduct 36/365=9.86% of the property taxes as if you paid them to the taxing authority yourself.   You will generally give the seller a credit at the closing for the taxes they paid in advance that cover your ownership period, but you are allowed to deduct the property taxes as if you paid them to the town or county, even if you did not give such a credit. 

3. If you paid points on the mortgage, you may be able to deduct the entire amount in 2021.  This depends on the financial circumstances of the transaction and Turbotax will ask you questions to guide you through this deduction.  If you can't deduct the points in a lump sum, you will deduct them spread out over the life of the mortgage. 

4. If you paid a lump sum mortgage insurance premium as part of your closing costs, you can deduct this spread out over 84 months, even if it is not shown on a 1098, starting with December 2021 (so you would deduct 1/84th of your lump sum PMI for 2021).  If you paid a VA funding fee for a VA loan, or a guarantee fee to the Rural Housing Service, this is a special type of mortgage insurance and may be deducted fully in the year of the purchase.  Enter this as a "mortgage not reported on a 1098" as described in #1. 

5. Items placed in escrow are not deductible when the escrow account is funded, because is it still your money until the insurance premium or property tax bill is paid.

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