Question:

When is there tax deduction for home mortgage insurance premiums (MIPs)?

Answer:

There exists certain tax deduction for home mortgage insurance premiums (MIPs) available for homeowners starting 2007 through 2010, as of now. The mortgage insurance premiums are fully deductible for borrowers with adjusted gross income of $50,000 (or $100,000 if filing jointly); tax deductions for home loan insurance premiums are unavailable for people with combined income of $109,000 (or $54,500 if filing separately), or higher.

Form 1098 Mortgage Interest Statement is used for tax deduction purposes for home mortgage insurance premiums and mortgage interest, paid throughout the year.

To be eligible for any yearly mortgage insurance tax deductions, beside the income requirement, your mortgage insurance has to be bought after 2006, and fully paid for the year you want to deduct it before taxes. That is, for MIP or PMI tax deductions for 2008 you should have bought the insurance in 2007 or 2008, and all premiums for 2008 coverage need to be paid prior 2009.

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