On February 9th, taxpayers got a surprise break for their 2017 tax returns. The Bipartisan Budget Act of 2018 included a last-minute allowance for private mortgage insurance (PMI) to be deducted for the 2017 tax year. If you plan to take advantage of this one, you cannot also take the standard deduction. Itemizing is required to take this special deduction. Also, if your adjusted gross income is more than $100,000, be sure to check the phase-out limits. There is no word on whether this deduction will continue into 2018.
What is PMI anyhow? When your down payment is less than 20%, most lenders require you to buy private mortgage insurance. This protects against losses should a person default on their mortgage.
Sick of paying mortgage insurance? You might have the home equity to refinance. Call us today for a free no-obligation consultation.
This information does not constitute and is not intended to be a substitute for specific individualized tax planning advice.