Category: Finding Deductions
Deduction for Mortgage Insurance Premiums (Overview)
The most common type of deductible mortgage insurance premium is Private Mortgage Insurance (PMI). Generally, though, if your mortgage insurance meets the following qualifications, it can be deducted on your return:
1. The mortgage is secured by your first or second home;
2. You pay mortgage insurance premiums for your mortgage;
3. The insurance contract was issued in 2007 or later;
To enter these in your TaxSlayer account, from the Main Menu select Federal Section > Itemized Deductions > Mortgage Interest and Expenses. Once you are done entering any mortgage interest that you paid, you will be taken to the Schedule A Interest menu where you can select PMI Deduction.
Q. Where can I find the deductible amount?
A. In most cases, you will receive a Form 1098, Mortgage Interest Statement, that will report the amount of your qualified premiums in Box 4. If you did pay qualifying mortgage insurance premiums and the deductible amount is not included in Box 4 of your Form 1098, you would need to contact the mortgage insurance issuer to determine the amount of your deduction.
Q. What is "qualified"?
A. Qualified mortgage insurance includes the following:
* Private Mortgage Insurance (PMI)
* Mortgage insurance provide by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service.
For it to be deductible, the contract must have been issued in 2007 or later.
Q. Is there a limit on the amount I can deduct?
A. Depending on your Adjusted Gross Income (AGI), your deduction may be limited. You can find your AGI on line 38 of Form 1040.
* If your AGI is more than $109,000 ($54,500 if married filing separately), you cannot deduct any portion of your mortgage insurance premiums.
* If your AGI is between $100,000 and $109,000 ($50,000 and $54,500 if married filing separately), your deduction is limited. If you are filling out your taxes on paper, you must use the worksheet from the Schedule A Instructions to determine the amount of your deduction for yourself. If you enter the amount in TaxSlayer, you don't need to worry about filling out the worksheet for yourself. TaxSlayer will do the calculations for you and determine what, if any, limitation applies to your deduction.
* If your AGI is less than $100,000 ($50,000 if married filing separately), your premiums are deductible in full.