Late last month, President Obama extended the tax deduction for mortgage insurance that was set to expire 2010 through 2011. Mortgage insurance is required when a mortgage has a loan to value of 80% or higher (or less than 20% home equity). A majority of mortgages have mortgage insurance either with a conventional mortgage (private mortgage insurance) or with an FHA insured mortgage.
Qualified borrowers with adjusted gross incomes of up to $109,000 if married and filing jointly or up to $54,500 for single filers, may be able to deduct the mortgage insurance premiums they paid during 2011. If the mortgage insurance is financed (as in VA funding fees, USDA guarantee fees), it may be deducted over a period of 84 months. This mortgage insurance deduction is available for mortgages closed for purposes of January 1, 2007 through December 31, 2011 that qualify as an "home aquistion debt".
You must file an itemized 1040 to claim this deduction and your mortgage insurance premium should be reported on Form 1098you receive from your mortgage servicer.
Remember, I am licensed to originate mortgages for homes located in Washington State, including Seattle, Bellevue, Tacoma and Everett. For more information about this (or any) income tax matters, please contact your CPA or professional tax adviser.