The keys to mortgage insurance deductions

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in Small Business Tax

Q. Can you still deduct the mortgage insurance premiums required to own a home? Hillsboro, Ore.

A. Yes. The itemized deduction for mortgage insurance, which was set to expire after 2010, was extended for one more year through 2011 by the 2010 Tax Relief Act. Note that mortgage insurance is generally required for borrowers who provide a down payment of less than 20% of the home’s purchase price. Normally, the insurance for a $100,000 loan will run you $50 to $55 per month.

Tip: The mortgage insurance deduction is phased out for taxpayers with an adjusted gross income (AGI) between $100,000 and $110,000.

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