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Level 1
posted Jan 25, 2023 11:06:44 AM

buy a house

if I bought a house this year(2022) and paid for points to lower my interest rate, where do i enter that and how does that help me to maximize my return?

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1 Replies
Employee Tax Expert
Jan 25, 2023 11:29:50 AM

According to this Turbo Tax article, you may deduct the points in the first year of purchase.  Keep in mind, this will only be a tax advantage if you are able to itemize your deductions for the year. If you do not have enough deductions to itemize, then the points won't have any affect on your return because you are taking the standard deduction.  Here is an article that explains itemized deductions more in detail.

 

To report the deduction, go to:

  1.  federal>deductions and credits>
  2. Your home>mortgage interest and refinancing
  3. Answer all the preliminary questions that are asked in the interview
  4. This includes details listed on your 1098 when you arrive at that screen.
  5. Two screens later, the program will ask you if you paid points in 2022 when you took out the loan
  6. Next question will ask how your points were reported to you. You will indicate these were on a 1098 or on a closing statement.