The total loan costs could consist of many items. Depending on what they are, will determine how to report them. There should be a breakdown of what is included on your settlement statement.
In general, the expenses you can deduct go in the same area as your regular mortgage interest. When you enter the new mortgage interest, the software will ask you questions about the new loan and you will be able to select that it was a refinance.
- Federal Taxes tab (Personal in the Home and Business Version)
- Deductions and Credits
- Your Home
- Mortgage Interest and Refinancing (select Add a Lender if you have already entered one)
If it was your primary residence, you can deduct any interest or real estate taxes on your Settlement Statement that are not already included on your Form 1098. Only pro-rated amounts can be deducted, not prepaid amounts held for escrow.
Also, you can deduct qualified points paid on a mortgage, but they have to be spread out over the term of the loan. The software will prompt you to select that. (Points can also be called loan origination fees, maximum loan charges, discount points, or loan discount.)
What kinds of refinancing costs can I deduct?
Still have questions?Make a post