Good news to those who have recently obtained or plan on obtaining a loan with private mortgage insurance! IF you qualify, that mortgage insurance premium you're paying is tax deductible through the year 2010!
Newly passed by congress, the mortgage insurance deduction will be extended to 2010.
Do you qualify? Here are the basics (from MGIC.com):
- The deduction applies to 'Qualified Residences'. Generally this is your primary residence and a non-rental secondary home. (Investment properties with PMI don't qualify for the deduction)
- Households with an adjusted gross income of $100,000 or less will be able to deduct 100% of their MI premiums. The deduction is reduced by 10% for each additional $1,000 of adjusted gross household income up to $109,000 (details below).
- If you file your taxes 'Married, filing separately' and you have adjusted gross incomes of $50,000 or less you'll be able to deduct 50% of your MI premiums. The deduction is reduced 5% for each $500 of adjusted gross income up to $54,500.
Here's a chart displaying the tax deduction percentages (courtesy of MGIC):
As always, please consult with a licensed professional about how these deductions work and if you qualify for this deduction.
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