Congress Extends Mortgage Insurance Tax Deduction

In December, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007, which, among other things, extended the tax deduction on private mortgage insurance (PMI) through 2010. Private mortgage protects the lender in case of borrower default and is typically required for mortgages when the borrower is putting less than 20% down. These mortgage insurance premiums are now 100% tax deductible for individuals and families with an adjusted gross income (AGI) of less than $100,000, with a partial deduction allowed with an AGI of up to $109,000. According to the Mortgage Insurance Companies of America, an industry group, the deduction will amount to approximately $350/year for the average taxpayer. Only properties purchased between January 1, 2007 and December 2010 qualify for the deduction under the Act. Contact your tax professional for more details.