Yes, you can deduct any mortgage interest or property taxes from your Form 1098 related to your new home purchase.
You are able to include certain items related to your home on your tax return. If you itemize, you get to take such things as:
- the interest that you pay on your mortgage
- real estate taxes
- mortgage Insurance
- points
For mortgage related information, your mortgage lender usually will sent you a Form 1098 which will include your mortgage information. (You may want to contact your lender to see when they will be sending out this information.)
For the real estate taxes, if these amounts are not reported on your Form 1098 or property tax bill, you will need to contact your local county government because they are usually the ones who do the property assessment and collect the property taxes. (Remember you are only allowed to deduction property taxes paid in the current year.)
Additionally, you may need your closing statement. This may contain information about points paid. (Contact your real estate agent if you need help with this statement.) Transfer tax at closing is not a deductible tax item when you buy a home. A transfer tax is essentially a transaction fee imposed on the transfer of title to property.
The only closing costs that may be deductible as a buyer of a house (if you are itemizing your deductions) would be amounts you paid at closing for any county or city taxes (additional property taxes), loan origination fees or loan discounts and prorated mortgage interest (if not included on your Form 1098 from your mortgage lender).
To enter your Property Taxes in TurboTax Online or Desktop (for TurboTax Online sign-in, click Here), please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Deductions and Credits”
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Your Home”
- Choose "show more", then Property Taxes and follow the onscreen instructions
To enter your Mortgage Interest in TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Deductions and Credits”
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Your Home”
- Choose "show more", then Mortgage Interest, Refinancing and Insurance and follow the onscreen instructions. You will need to enter the Mortgage lender's name and interest income.
To enter your Mortgage Insurance in TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Deductions and Credits”
- Next click on "jump to full list" or “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Your Home”
- Choose "show more", then Mortgage Interest, Refinancing and Insurance and follow the onscreen instructions
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