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Level 1
posted Feb 12, 2023 1:17:13 PM

turbotax delux won't allow deduction of primary home mortgage points during first year of loan

I purchased a new primary home early in 2022 and paid $6,490 in points as indicated on the 1098 form from the mortgage company.  I entered this info and the turbo tax spreads the points out over the length of the 30 - year loan...I believe the points are deductible in total during the first year or they can be spread out.  The only way I can get turbo tax to deduct the total points amount this year is to enter "1" for the length (years) of the loan.  Am I missing something?  Thanks...

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1 Best answer
Expert Alumni
Feb 12, 2023 2:20:28 PM

TurboTax amortize points when they apply to loans on a second home, or loans to refinance your home (if not used for home improvements).


However, if you purchased your home in 2022 or refinanced it to make improvements, you can deduct all of your points on your current tax return rather than amortizing them over the life of the loan.  

 

You have to continue in the program until you see the screen below, if you choose that it is a HELOC or refinance and did not use the loan for other uses, you will get the full deduction this year.

 

 

 

3 Replies
Expert Alumni
Feb 12, 2023 2:20:28 PM

TurboTax amortize points when they apply to loans on a second home, or loans to refinance your home (if not used for home improvements).


However, if you purchased your home in 2022 or refinanced it to make improvements, you can deduct all of your points on your current tax return rather than amortizing them over the life of the loan.  

 

You have to continue in the program until you see the screen below, if you choose that it is a HELOC or refinance and did not use the loan for other uses, you will get the full deduction this year.

 

 

 

New Member
Mar 19, 2023 6:45:18 PM

This solution did not work for me.  Turbotax continues to amortize my points over 30 years.  Bought and sold primary home in 2022.  Over $17K points I want to deduct.

Expert Alumni
Mar 20, 2023 7:34:48 AM

You might review your answers to the questions in the interview to be sure you qualified to deduct all the points.

 

  1. Enter 1098 information as shown on the form.
  2. Yes, this loan is secured by a property of yours.
  3. Check boxes for: This is a new loan for which I paid points and I bought or improved by main home with this loan in 2022.
  4. No other boxes checked under "Tell us about any points paid..."
  5. Enter points as paid. Check box for "This loan was paid off or refinanced with a different lender in 2022." (This may not be true for your situation, but it can prevent program issues. Try toggling this off if your issue remains.)
  6. Yes, this is the most recent form for this loan.
  7. Check box for "This loan is neither of these."
  8. Yes, I've used this loan only on the home I took it out on.
  9. Continue and click Done on the Home Mortgage Summary page.
  10. Answer subsequent questions, if any, with relevant information.
  11. If your mortgage interest is limited, TurboTax will provide you with the option to enter your calculated allowable interest.
  12. Continue to the end of this section.

As long as your mortgage interest is not limited. all points should be deductible. Otherwise, points will be limited by the same percentage as your mortgage interest.

 

@hootothecore