Can i deduct fha mortgage insurance

You can amend federal returns within three years from the date of a timely filing of the original return or up to two years after you paid the tax owed, whichever is later. But even if you qualify for the deduction, it may not make sense to take it. The deduction is only possible if you itemize deductions. Thus, the itemizations and the PMI deduction would be moot for you.

Keep in mind, though, that the amount of the down payment, type of loan and lender requirements can all affect your actual cost. A better move than deducting PMI is to get rid of it, if you can. Generally, homeowners can get PMI canceled and save the premiums once they achieve the threshold of 20 percent equity in their homes. All too often, homeowners continue to pay for PMI after they could have ended it, though by law mortgage servicers are required to drop this charge when the loan balance falls to 78 percent.

The deduction is allowed only if the mortgage on which you pay PMI was taken out on or after Jan. If you refinanced your home since that time, you qualify for the PMI deduction on that loan. However, the mortgage insurance deduction applies to refinances up to the original loan amount, not to any extra cash you might have received with the new home loan.

You might be able to deduct private mortgage insurance payments on a second home, too. As with your primary residence, the loan on the second home must have been issued in or later to be deductible.

The PMI on the additional property qualifies only if the home is used by you personally. It depends on how much you owe and your tax bracket. The precise calculation can be complicated, as it involves various factors. Finally, while there is no statutory limit on the amount of PMI premiums you can deduct, the amount might be reduced based on your income.

This income limit applies to single, head of household or married filing jointly taxpayers. How We Make Money. Written by R. Written by. Edited By Bill McGuire. Edited by. Mortgage insurance premiums are treated as mortgage interest for tax deduction purposes. You pay the annual mortgage insurance premium in monthly installments along with your FHA mortgage payment. At the time of publication, annual mortgage insurance premiums paid to the lender were no longer eligible for the tax deduction.

Karina C. Hernandez is a real estate agent in San Diego since She has also worked as a mortgage originator and real estate transaction coordinator. She has a B. By Karina C. Hernandez Updated January 05, Editorial Independence We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission.

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