Is FHA mortgage insurance tax deductible?
Legislation was recently passed to make FHA mortgage insurance premiums paid on loans (both purchases and refinances) closed in 2007 tax deductible from Federal taxes. Under this legislation, married taxpayers who have an annual income of $100,000 or less ($50,000 for single taxpayers or married taxpayers filing separately) will be entitled to deduct from their Federal taxes the mortgage insurance premium that they pay with their monthly mortgage payment and a certain portion of the premium they paid at settlement. The tax deductible amount decreases as income increases above $100,000 and terminates entirely if the income is above $110,000. The legislation only allows FHA mortgage premiums paid during 2007 to be tax deductible. If Congress takes no action to extend this provision beyond 2007, FHA mortgage insurance premiums will not deductible in future years. Also, loans closed in 2006 and years prior are not eligible for any tax deduction. Later this year the IRS will be publishing t
