Mortgage points paid

[Codefreeze]

Hello

When we bought our house in 2022, the CD had mortgage points listed. However few lines down in the CD, that was given as a lender credit. However, I received 1098  from my mortgage company that shows that I paid the points on box 6.  Should I claim this as credit or do I not? Thank you.

[JulieS]

Yes, you can deduct the point paid on your mortgage if the following apply:

• The mortgage is used to buy, build, or improve the home, and the home is the collateral for the loan
• Paying mortgage points is a customary practice in your area and the points you paid aren't excessive for your neighborhood
• The points were paid directly to the lender, either by you or the seller (no borrowing)
• Your down payment, plus any points the seller paid, exceed the points paid amount
• You use the cash method of accounting (almost all taxpayers do)
• The points are calculated as a percentage of the mortgage principal 

If you meet all the above criteria, you can either deduct all your points in the year you paid them or deduct them in equal increments over the life of the loan. Either way, you'll need to itemize to get the deduction.

Go ahead and enter the points when you enter your mortgage interest in TurboTax and the program will treat them as deductible based on your answers to the follow up questions.