Did you know that mortgage insurance premiums you paid during 2010 may be tax deductable? This is eligible for mortgage insurance contracts that were issued after 2006 for the use of purchasing your home (primary residence or second home) and is not limited to what you may traditionally think of as "private mortgage insurance".
Qualified mortgage insurance may include:
- private mortgage insurance (may be paid monthly, lump sum at closing or both)
- FHA annual mortgage insurance (paid monthly)
- FHA upfront mortgage insurance premium (paid upfront at closing)
- VA Funding Fee (paid upfront at closing
- USDA Guarantee Fee (similar to a funding fee; paid upfront at closing)
Qualified mortgage insurance is reported in box 4 on your 1098 Mortgage Interest Statementwhich you should have received from your mortgage servicer (who you make your mortgage payments too). This deduction is treated essentially the same as deductible mortgage interest. You will need to file an itemized tax return in order to claim this deduction. If your adjusted gross income is more than 109,000 ($54,000 if married filed separately) you cannot claim this deduction. You can refer to Line 13 (of the Instructions for Schedule A of the 1040 (on page 7) and IRS Publication 936 more information.
Remember, please seek the advice of your tax professional or CPA. I am licensed to originate mortgages on homes located in Washington State.