Who Qualifies to Deduct Private Mortgage Insurance Premiums?
The IRS is lessening the sting of PMI premiums by allowing qualified taxpayers who acquire new home loans in 2007 to deduct premiums as itemized deductions. A qualified loan must be incurred for home-acquisition debt, that is, the mortgage must be taken out to purchase a home, as opposed to a home equity loan, which can be used for any purpose. Qualified taxpayers must have adjusted gross income (AGI) of less than $100,000 ($50,000 if married and filing separately) to receive a full deduction. The deduction is reduced by 10 percent for every $1,000 ($500 if married and filing separately) over the AGI limits. Sources Internal Revenue Service Chicago Tribune Federal Reserve Bank of San Francisco About the Author Kelly Wingard is a freelance writer and a 25-year veteran tax preparer. She contributes regularly to the University of Illinois Tax School training manual for tax professionals.
