PMI Tax Deductibility Extended Through 2011
There’s great news for homeowners! Congress recently extended legislation making private mortgage insurance (PMI) premiums tax deductible through 2011!
So why is this significant? PMI can help people buy a home sooner, by enabling them to put less than 20% of the purchase price down when buying a home. This increase in purchasing power can sometimes be the difference between affording the home of your dreams…or not.
What’s more, this deduction is not just for first-time homebuyers, so it can be used by current homeowners looking to upgrade to a new home. However, it does only apply to “qualified” residences, which typically include a primary residence and a vacation home, but not an investment property.
It’s important to note that PMI is only tax deductible for homeowners with adjusted gross incomes of less than $110,000. Borrowers with adjusted gross incomes up to $100,000 may be able to deduct 100% of their 2011 premiums. Deductions are phased out in 10% increments for borrowers with adjusted gross incomes between $100,000 and $109,000.
As with any deduction, be sure to consult your tax advisor if you have any questions.
Source: Courtesy of Sean Fleming Mortgage Advisor