Mortgage Insurance and Tax Deductions

Save Money This Tax Season

I bet you did not know this interesting tax-time tidbit: If you pay monthly mortgage insurance with your mortgage payment, it may be tax deductible, saving you money on your income taxes.

Many tax preparers will only prepare your taxes based off what you give them—a 1098 form—from your lender. Lenders may or may not include the mortgage insurance on the form 1098 they provide you if the amount is less than $600. If this is the case, you may be missing out on a valuable deduction.

In short, provide your tax preparer with not only your 1098 form from your lender, but also a mortgage insurance statement—this is not homeowners insurance—from your lender and the HUD-1 settlement statement, if you purchased or refinanced that calendar year.

Lastly, any up-front mortgage insurance premiums, which are found on most FHA loans, may result in additional deductions, as well.

When preparing your taxes, be sure to have this info handy, as it could save you money.

Disclaimer:  I am not a CPA. However, I am really, really, really good at residential mortgage loans, but I stink at preparing tax returns. So, please, consult with your tax preparer on these matters.

Happy tax season!