January 3, 2011
FHA home loans have advantages over conventional mortgage loans; for some buyers those advantages include tax breaks in some areas as allowed by current federal tax laws. Like so many other aspects of buying a home, there’s no standard tax deduction guidance for all borrowers–much depends on current law, the type of loan, and sometimes even the income of the borrower.
What follows is not tax advice, but merely a reminder that FHA mortgage holders should ask their tax preparers (or hire one) about FHA mortgage insurance deductions on their taxes.
The FHA’s official site includes a section which mentions tax deductions for FHA mortgage insurance premiums. According to the FHA, “Legislation was recently passed to make FHA mortgage insurance premiums paid on FHA-insured loans tax deductible, subject to conditions.” FHA borrowers and those who have refinanced between 2007 and 2010 may find certain IRS guidelines apply to them when it comes to deductions for mortgage insurance. The FHA advises borrowers to consult a tax pro or the IRS for more information.
The IRS official site states, “In general, if you itemize deductions, you may deduct premiums paid for mortgage insurance provided by the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Rural Housing Service (Rural Housing), or private mortgage insurers in connection with a mortgage for the purchase of your main home.”
These deductions, where applicable, are limited when the borrower’s gross income is more than $100,000 or $50,000 for those married and filing separately. The IRS adds, “No deduction is allowed if your adjusted gross income is more than $109,000 ($54,500 if married filing separately). See the
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: