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Are Mortgage Points Tax Deductible? Have Real Estate Questions? Amber Castonguay 920.988.0048
When you took out a mortgage to buy your home, did you pay points? You may be able to deduct that prepaid interest on your federal tax return — but only if you meet a long list of rules. If you determine that your purchase mortgage points are deductible, you'll report them on Schedule A of Form 1040. Image: Liz Foreman for HouseLogic The points you paid when you signed a mortgage to buy your home may help cut your federal tax bill. With points, sometimes called loan origination points or discount points, you make an upfront payment to get a particular rate from the lender.
Since mortgage interest is deductible, your points may be, too. If you itemize your deductions on Schedule A of IRS Form 1040, you may be able to deduct all your points in the year you pay them.
Some high-income taxpayers have their total itemized deductions limited, including points. You can read more about that in the instructions for Schedule A.
Lucky for you, the IRS doesn’t care whether you or the homesellers paid the points. Either way, those points are your deduction, not the sellers’.
Tip: Tax law treats home purchase ... more
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