Frank Ellis, a tax preparation expert and author, has published an article on the American Tax Service website, which explains how Private Mortgage Insurance (PMI) can be deducted . The information applies to those who don’t have a 20% down payment at the time of home purchase. Protecting the lender against defaults on mortgage loans, PMI can also be deducted when filing tax returns, the author reveals.
Introduced in 2006, the tax deduction applies to PMI plans issued from 2007 on, the article states. Lawmakers extended the tax break to help the recovering housing market. Premiums paid up to 2016 are eligible for deductions, as determined by Congress. According to Ellis, policies from the Federal Housing Administration can be deducted, along with those taken out from other institutions and private insurers.
The article explains how homeowners must itemize their deductions, and under what circumstances. It also states where one can find the PMI deduction in Schedule A, and the amount one can claim is listed in Form 1098, the author says.
In addition, Ellis lists a variety of time and occupancy restrictions. Time restrictions regarding refinancing, second home loans, and the use of the property are explained as well. Ellis also covers income phaseouts, and how the amount one can deduct depends on their annual earnings. Eligibility can also be determined by using TurboTax Online , the author says, which identifies forms and refund calculations based on the taxpayer’s answers.
To learn more about deducting PMI, go to http://americantaxservice.org/deducting-pmi-private-mortgage-insurance/
About Frank Ellis
Frank Ellis is a Traverse City Tax Preparation Planner and published author. He has written tax and finance related articles for eight years and has published over 900 articles on leading financial websites.
American Tax Service
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