Home Mortgage with PMI

[cpals]

I thought I read somewhere that if you pay PMI on your home insurance you will be able to deduct it from your taxes this year. Is this true?

I purchased my home in April, 2007 and currently pay PMI on my insurance; so in January I should be able to deduct it?

Also, will the tax programs like TaxACT, etc be able to figure this out or should I go see a tax company? I've always done my taxes myself, but this is the first year I've owned a home.

Thanks.

 

[iamwiz82]

Yes, it is deductible this year. You will need to get the correct level of tax software. I don't use TaxAct, but I assume they have multiple versions, you need the one that allows you to itemize. Turbotax Deluxe, for example.

 

[cKGunslinger]

I use TurboTax online for my taxes, and it will let you itemize your deductions, then let you know if it is better to continue, or just to scrap it and take the standard deduction.

 

[EagleKeeper]

Most standard tax S/W will handle the requirements for the Schedule A.

They may try to encourage you to upgrade, but they can not get certified by the IRS unless they provide the basics.

 

[gooseman]

Tax Act will do it. At least last years version did.

 

[ultimatebob]

PMI is tax deductible now? Sweet

I'll make sure to rub little factoid that in my co-workers face. He's the one who thought that his 6.75% interest 80% primary mortgage with a 8.5% 15% secondary mortgage was Sooo much better than my 95% 5.5% interest FHA mortgage with PMI because of the tax benefits.

(Hey, I live in Connecticut! Almost nobody out here can afford a 20% downpayment on a $200,000+ house when they're in their 20's!)

To be honest, the numbers looked quite close in the short run, but I was projected to save a lot more in the long run. This little tid bit changes things, though!

 

[cpals]

Now, is this just for this year or from now on? I couldn't get that part.