A New Tax Deduction!
For years, homeowners who bought a home with less that a 20% down-payment were required to purchase what's called private mortgage insurance (PMI) to protect the lender against payment default. PMI payments were NOT tax-deductible for the homeowner.That has changed for some of you! A new law recently signed by the President now allows a homeowner to deduct the PMI expense along with the mortgage interest on your income tax.
The new deduction is good from now until 2010, but there are a couple of conditions that must be met. (Isn't that always the case?)
1. The full deduction is limited to homeowners with Adjusted Gross Income (AGI) of $100,000 or less. From $100,000 to $109,000 AGI, a partial deduction is allowed.
2. This deduction only applies to mortgages issued after 12/31/06. It's estimated that more than 2,500,000 homeowners will qualify.
If that's you, take advantage! Hey, every little bit helps - take ALL of the deductions that you legally can!
For more advice on how to do that and a bunch of other tax tips, check out the following articles:
Looking for a Home Office Tax Deduction?
Frequently Overlooked Deductions
Make Your Deductions Airtight
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