The President has signed the bill extending Mortgage Insurance tax deductibility through December 31, 2011. This makes it a great time to use MI to buy a home sooner and enjoy predictable payments, while benefiting by deducting the premiums from your income taxes. And MI can be canceled once the home buyer builds enough equity.
Details on Tax Deductibility for MI Remain Unchanged
- The home purchase or refinance loan must close between January 1, 2007 and December 31, 2011;
- Household income must be at or below $100,000 for a full deduction of premium;
- The premium deduction is reduced 10% for each $1,000 of income over $100,000;
- The premium deduction is prorated in the first year based on the month the loan closes;
- Applies to primary residence and one other residence purchased for personal use by the taxpayer;
Monthly, annual, and single MI premiums are eligible. Financed premium deductions should be taken over a seven year period.
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