Mortgage Insurance Tax-Deductible for Some Home Buyers
As down payment requirements are rising, did you know that you may qualify for a tax savings in the form of tax-deductible mortgage insurance payments? Congress created a provision in 2006 that allows some home buyers to deduct mortgage insurance payments for mortgage insurance contracts issued after Dec. 31, 2006 and for mortgage insurance payments made before Jan. 1, 2011. The deduction is allowed for premiums related to a principal residence and even a secondary non-rental residence, but not for home equity loan debt. The deduction is subject to an income phase-out. The amount allowable as a deduction is phased out for taxpayers with adjusted gross income in excess of $100,000 ($50,000 for a married taxpayer filing a separate return). Partial deductions are allowed for taxpayers with adjusted gross incomes between $100,000 and $110,000 ($50,000 and $55,000 for married filing separate). Combine this with the new first-time home buyers credit and you may find significant tax savings! This information was gathered from an article in the Nation’s Builder News.
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