Can you claim refinancing costs on taxes?

I refinanced my home last December 2012, but forgot to tell my tax preparer. Are there expenses related to refinancing my mortgage?

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  • brad
    Lv 4
    6 years ago
    Best Answer

    You can amortize the points (loan origination fees) over the life of the new loan. If proceeds from the refinance were used to substantially improve the residence then the points relative to that portion of the new loan are fully deductible provided they meet the other criteria for deducting points.

    Edit:

    "Refinancing. Generally, points you pay to refinance a mortgage are not deductible in full in the year you pay them. This is true even if the new mortgage is secured by your main home.

    However, if you use part of the refinanced mortgage proceeds to improve your main home and you meet the first 6 tests listed under Deduction Allowed in Year Paid, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. You can deduct the rest of the points over the life of the loan."

    Source(s): http://www.irs.gov/pub/irs-pdf/p936.pdf page 7 near the bottom middle column.
  • 6 years ago

    When you refinance a home, the points or origination charges that you may have paid can be deducted over the life of the loan. You cannot deduct them all at one time, even if the proceeds are used to improve the home.

    If you had points or origination charges from the loan that was paid off when you refinanced, then any amounts that had not been deducted can be fully deducted in the year you refinance. If this applies to you, you might want to amend your return and take the additional deduction.

    Many loans today do not have points because the purpose of points is to prepay interest so that the interest rate over the life of the loan is reduced (to "buy down" the interest rate). Since interest rates are historically very low, it is unusual to be charged points. The points will appear on your HUD statement.

    No other expenses, such as surveys, recording fees, realtor commissions, are deductible on a mortgage.

  • 6 years ago

    Generally......No.

    Most closing costs are not deductible.

    Any points/loan origination fees would be deductible but, on a refinance, they have to be spread out over the life of the loan.

  • tro
    Lv 7
    6 years ago

    probably not, only additional interest you might have paid

    you can amortize the 'points' but that would be so insignificant would hardly be of any importance

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