If you purchased a home and are paying PMI (Private Mortgage Insurance) you may be able to deduct the mortgage insurance payments on your taxes!
Question 1: I bought my main home in 2008 using a mortgage and I pay monthly premiums for mortgage insurance. Can I deduct these payments?
Answer: 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.
Use Form 1098, Mortgage Interest Statement, to report mortgage interest (including points, defined later) of $600 or more received by
you during the year in the course of your trade or business from an individual, including a sole proprietor. Report only interest on a
mortgage, defined later. The $600 threshold applies separately to each mortgage; thus, file a separate Form 1098 for each mortgage. You may, at your option, file Form 1098 to report mortgage interest of less than $600, but if you do, you are subject to the rules in these instructions.
The amount you may deduct is limited if your adjusted gross income.
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