Can I write off closing costs on my tax return?

However, there are a few exceptions to this rule. Specifically, any points paid to reduce the interest rate on your mortgage can be deducted in the tax year in which the home is purchased. Points are essentially prepaid interest, and their deductibility is designed to incentivize borrowers to invest in lower interest rates.

When considering the tax deductibility of closing costs associated with purchasing a home, it's important to understand that the majority of these expenses are not tax-deductible. This means that, in most cases, you cannot claim them on your federal income tax return.

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Additionally, real estate taxes paid upfront at closing can also be deducted on your tax return. These taxes are typically assessed based on the property's value and used to fund local government services such as schools, police, and fire departments.

It's worth noting that the deduction for mortgage points and real estate taxes is subject to certain limitations and may need to be amortized over the life of the loan. Therefore, it's important to consult with a tax professional to ensure you're taking full advantage of any deductions available to you.