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Refinancing Your Mortgage
What Can You Deduct on Your Tax Return?
There are some special tax rules with regard to what costs can be deducted in connection with a refinancing. Let's see what tax breaks you'll get from Uncle Sam. Interest and Points Depending on how you refinance, there are several different ways the interest and points on the loan are treated for income tax purposes.
* If you finance the points, they cannot be deducted in the year of the refinance, but are deducted equally each year over the term of the loan. What happens if this is your second refinance and you still have points left over from the first refinance that have not yet been fully deducted? You are able to deduct the remaining balance of the points in the year of the subsequent refinance. This information should give you an idea of what's tax-deductible and what's not. You consult your tax professional to clarify anything you don't understand and to verify that the information is still valid under current law. Keep in mind that tax laws are always subject to change, and that the tax information provided here could change at any time. Share Article:
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