Are mortgage-insurance premiums tax deductible?
Diana Heeb Bivona
Starting in 2007, mortgage-insurance premiums will be tax deductible. Did that grab your attention? Well it should because for the first time ever, mortgage-insurance premiums on conventional, as well as government loans can be written off on your 2007 tax return.
There are a few things to be aware of with this new tax deduction –wouldn’t be the IRS if there weren’t caveats, would it? Here are the top three. Read more at the IRS website.
- It’s NOT a dollar-for-dollar write off. It is a “below the line” deduction (like your mortgage insurance) based on your tax bracket. So, if you are in the 31% bracket, your actual tax benefit is only $.31 on every dollar of insurance premium.
- Can claim only if you file an itemized return.
- The deduction is limited to borrowers with adjusted gross incomes (AGI) of $109,000 or less.
The Mortgage Insurance Cos. of America (MICA) is projecting that the average annual savings for a taxpayers will be between $300 and $350 so it may be worth your time to take a closer look at this particular deduction.
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