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Originally posted by synic213
Hi Gar. Thanks in advance!
Couple of questions:
1) I refinanced my home last year and was told at the time I did it that the refianance costs associated with the loan could be written off on my taxes. I've always done my taxes with the TurboTax program, and I've never seen a field where I can enter information regarding refinance costs. Is there a special form I need to fill out to claim these costs, or was I mislead and these fees cannot be written off?
2) My wife and I had our first baby last year and since the birth she has been a stay-at-home mom (unemployed). Occasionally (2 - 3 times a month) my wife will baby-sit another child, and get paid for it. Do we have to claim this as income, and if so, what is the best way to do it?
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Not necessarily the refinance costs. You can write off points (as long as they are based on a % of the total loan), and NOT the other costs. You're stuck with those.
When you refinance, the points won't be reported on a 1098 (which you get from you bank showing the mortgage interest paid). You'll need to look on your HUD closing statement (stamped final), and they're usually on the second page near the top (around 2-3 legal size papers stapled together). These get amortized (or written off) on the "straight-line" method over the life of the loan, usually 15 or 30 years. It gets included as an itemized deduction on schedule A, and included with your mortgage interest paid.
If you paid no points, tough titties. No write-off for you!
The IRS would have a hard time tracking your wife's baby-sitting income, especially if it never got deposited into your bank account. Being realistic, I wouldn't worry too much about it, since it doesn't sound excessive.