Mortgage Insurance Tax Deduction Reinstated And Extended To 2013
January 2nd, 2013 by Christian Durland
One of the lesser known negotiations that happened with the “Fiscal Cliff” included a reinstatement and extension of the expired ability of homeowners to treat mortgage insurance as a tax deduction, which expired on January 1st 2012. This is simply a HUGE WIN for homeowners as well as for those will become homeowners in 2013.
Originally the mortgage insurance premium deduction was enacted in 2006, and it allowed for homebuyers and homeowners who were refinancing their homes to write off their premiums. However this legislation was not renewed in early 2012 due to the “debt ceiling negotiations” going on at the time.
Borrowers who are single or married and filing jointly with adjusted gross incomes of $100,000 or less can write off 100% of their annual mortgage insurance premiums. Married households filing singly can write off 50% of premiums. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.
However, it appears to get even better. It looks as if the mortgage insurance tax deduction has been retroactively reinstated to apply to any mortgage insurance paid after December 31st, 2011!
This is great news for those homeowners who purchased or refinanced homes in 2012 to take advantage of a healthy write off when filing their upcoming 2012 returns, and help put some money back in the pockets of middle class homeowners over the next 2 tax years at the very least***
Interest rates have trickled up a bit over the last 30 days, however they continue to stay put at historic lows and now coupled with this great news about the ability to write off mortgage insurance continues to make the prospects of purchasing a new home or refinancing one’s mortgage quite attractive.