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Can I deduct mortgage closing costs?

SOLVEDby TurboTax1549Updated December 11, 2023

Mortgage closing costs are the fees associated with securing a mortgage when you buy or refinance a property. Your total closing costs depend on the home’s purchase price, your loan type, and your lender. 

Closing costs are divided between you and the seller. As the buyer, your portion of the costs may include:

  • Lender fees
  • Loan underwriting fees
  • Mortgage discount points
  • A mortgage insurance premium

You can find your mortgage closing costs in the loan estimate and the closing disclosure.

For your primary or secondary home, the only deductible closing costs are home mortgage interest and certain real estate taxes. These deductible costs generally include:

  • Real estate taxes paid at closing
  • Mortgage interest paid when the cost was settled
  • Interest paid at the house’s purchase
  • Loan origination fees, known as “points”

Note: Other costs are deductible when refinancing your rental property.

You can add other settlement fees or closing costs to the basis of your property. This way you’ll get credit for those costs when you sell the home. These base adjustments include:

  • Abstract fees
  • Charges for installing utility services
  • Legal fees
  • Recording fees
  • Surveys
  • Transfer taxes
  • Title insurance
  • Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions 

To deduct your mortgage closing costs in TurboTax, go to the Deductions & Credits section of your federal return and select Start next to Mortgage Interest and Refinancing (Form 1098). If you have multiple 1098 forms due to refinancing, ensure they’re first entered correctly.

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