Can I deduct or amortize Mortgage Origination Fee paid in TY2022 part of TY2023 tax return?

[narayananvm]

I got my first home mortgage loan for my primary residence on September 2022 and paid a "Lender Origination Fee" of $1,335.00. This was not expressed as a % of the loan amount and was stated as a flat amount in the Closing Disclosure under section "Loan Costs: Origination Charges". When filing tax returns for TY2022, I was not able to report the origination fee as a home owner's expense item as I did not itemized my returns as I got better returns using standard deduction method. Now I'm filing tax returns for 2023 and itemizing my returns gives me more deductions. Can I report and deduct the origination fee of $1,335.00 I paid during TY2022, part of tax returns for TY2023? If yes, can I take this deduction completely or should it be amortized over the course of the loan term?

[zomboo · Accepted solution]

You only had a choice to deduct all the the origination fee on your 2022 tax return. Since you took the standard deduction for 2022, you have selected to amortize the fee over the life of the loan by default. The amortized amount will be subtracted from the total remaining points each year regardless if you itemized or not. Tell Turbo Tax you paid points and that you are spreading the points beginning in 2022 and Turbo Tax will calculate your deductible amount allowed in 2023.

[narayananvm]

Thank you. TurboTax help topics also explained it clearly. I have amortized it, unfortunately it will be a slow grinding $44 over 30 years!