I bought a primary residence single family home in 2022. Do I have anything to claim or get any deductions beyond my Mortgage interest, property taxes?

[xmasbaby0]

HOMEOWNERSHIP DEDUCTIONS

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

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.

Home Ownership

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.

[DoninGA]

The purchase of a personal residence, not used as a rental or in a business, is not reported on a tax return.

[Opus 17 · Accepted solution]

In the year you buy the home, you may be able to deduct:

1. Points.  Points are a fee used to get a discount on the interest rate.  They might not be listed on your 1098 form.  Points are considered a form of mortgage interest if they are a percentage of the loan amount (not a fixed fee) and if they are not assigned to any specific purpose (like the bank attorney, surveying, etc.).  Depending on the amount of cash you brought to close, points might be fully deductible in the year you closed, or you might have to spread them out over the length of the mortgage.  The interview will ask you questions to determine this.

2. Daily interest.  You likely paid interest from the closing date to the last day of the month as part of your closing costs.  That daily interest is deductible, but it might not be included in the interest reported on the 1098.  It will be shown on your closing statement.

3. Property taxes.  You can deduct taxes paid on the property for the dates you owned the property, even if you didn't pay the tax directly to the taxing authority.  For examples, suppose the property tax bill is assessed for 1/1/22-12/31/22 and paid on Feb 15.  You bought the home in July.  You would have paid the seller a property tax credit for the days that they paid for (in advance) that you owned the home, shown on your closing statement.  Those taxes are deductible as if you paid them to the city directly.    On the other hand, suppose you live in a state where property taxes are charged in arrears.  You will be billed on January 15, 2023, for the entire 2022 year.  You can only deduct the portion of taxes that correspond to the dates you owned the property.

[daa]

hi, are amounts for the points, daily interest & property taxes paid at closing that are not reported on 1098 to be added to original 1098 amounts when entering in turbotax home & business desktop or are they to be entered as separate form?  thank you

[LindaS5247]

You should report the points and daily interest separately. You should not add them to your Form 1098. They go on a separate line on your tax return since they were not on Form 1098.

As far as filing taxes goes, claiming a tax deduction for mortgage points is a fairly straightforward process. Mortgage points are considered an itemized deduction and are claimed on Schedule A of Form 1040. Here are the specifics:

• Usually, your lender will send you Form 1098, showing how much you paid in mortgage points and mortgage interest during the year
• Transfer this amount to line 8a of Form 1040 Schedule A
• If any of your points were not included on Form 1098, enter the additional amount you paid on line 8c of Form 1040 Schedule A

For many taxpayers, the process is this simple. In some cases, though, calculating and deducting mortgage points can be tricky. With TurboTax, just answer a few simple questions and we can help you get the proper deduction for your mortgage points.  The interview section regarding your home purchase will ask you questions to determine this.

Daily interest paid at closing is deductible, but it might not be included in the interest reported on the 1098.  It will be shown on your closing statement.  The interview section regarding your home purchase will ask you questions to determine this.

You can deduct taxes paid on the property for the dates you owned the property, even if you didn't pay the tax directly to the taxing authority.  You can only deduct the portion of taxes that correspond to the dates you owned the property. The interview section regarding your home purchase will ask you questions to determine this.

Buying a home does not necessarily bring you a large refund. Your deductions for homeownership combined with your other deductions must exceed your standard deduction to change your tax due or refund. 

Click here for detailed information regarding buying a home and your taxes.

Click here for information regarding how to deduct mortgage points.

[Opus 17]

@daa 

I believe that when you enter the 1098, there is an additional space to report “property taxes not reported on a 1098“.

For the daily interest, create a separate lender (usually in the name of the closing bank, which is often different than the company servicing your mortgage), check the box for  “I did not get a 1098 for this lender“ and enter the daily interest (assuming it is not already included in the figure reported on the 1098, which you will have to check yourself).

For the points, they are entered separately, because there is an interview in which you have to demonstrate that you are qualified to deduct the points all at once, rather than over 30 years. You can enter the points either under the name of the servicing lender that sent the 1098, or under the name of the originating bank.

[daa]

thank you!

[daa]

thank you!