Mortgage Insurance

An article crossed my desk that mentioned homeowners with a new mortgage originated between 2007 and 2010 carrying PMI (Private Mortgage Insurance) lets taxpayers with an adjusted gross income of less than $100,000 write off the full cost of the PMI.  For people that earn less than $109,000, they can take a write-off for only part of it.  This was part of the Tax Relief and Health Care Act of 2006.  According to the tax relief act, the break initially applied only to the 2007 tax year but it was extended through 2010 by the Mortgage Forgiveness Debt Relief Act of 2007.  This is great considering most folks can’t afford to put down 20% or more on their mortgage.   On Average the annual tax break from the deductions will be worth around $350 per taxpayer.  This is according to the Mortgage Insurance Companies of America. Each year borrowers get Form 1098 from their lender, this is where insurance premiums should be reported, and it is located in Box 4 of the form.  In my personal opinion, always use an accountant.  They are most likely to be more on top of these tax breaks than the “do-it-yourself” accounting software.

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Tags: 1098, accountant, down payment, FHA, mortgage, mortgage forgiveness, new home purchase, PMI, private mortgage insurance, tax, tax breaks, taxpayers

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