Taking It Off. Suppose you close in August on a 20year FHA mortgage and pay an upfront mortgage insurance premium How to write off pmi 8, 400 premium at closing, which covers the life of the loan. That translates into a 100 deduction for How can the answer be improved? The mortgage insurance deduction is eliminated once your AGI surpasses 109, 000 (54, 500 if married filing separately). The deduction can be taken for private mortgage insurance policies issued by private insurers, as well as for insurance provided by the Federal Housing Administration, the Department of Veterans Affairs and the Department of Agricultures Rural Housing Service.
You must itemize deductions to get the writeoff. Private mortgage insurance, or PMI, is insurance provided to mortgage lenders to cover losses in case of borrower default on VA, FHA and rural housing loans. If you paid PMI on a home loan issued after 2006, you can deduct the amount paid for PMI on your federal tax return.
There are limits on the deductions, however. For PMIpaying homeowners with an adjusted gross income of more than 100, 000, the amount of insurance premiums allowed to be deducted is reduced. Additionally, PMI premiums arent deductible for those with AGIs of more than 109, 000.
Contact your lender to find out the appropriate PMI cancellation procedures. It's best to write a letter to your mortgage lender, formally requesting guidelines. Get your home appraised by a professional to find out its current market value.
The federal Homeowners Protection Act (HPA) provides rights to remove Private Mortgage Insurance (PMI) under certain circumstances. The law generally provides two ways to remove PMI from your home loan: (1) requesting PMI cancellation or (2) automatic or final PMI termination.
The BEST write off for some Home Owners has been as direct result of the reduced tax liability thanks to the Tax Relief and Health Care Act of 2006 that made PMI premiums on your taxes deductible.