Ben Franklin once said… “The only two certainties in life are Death & Taxes.”
If reading this, the latter has arrived. Hopefully not the former. Or else you're into some
wicked sorcery type shit. Please take that Harry Potter bad haircut elsewhere.
Tax season is full of tears. The cost of living under the Ole Red White & Blue is personified in actual dollars.
We certainly enjoy a buffet of social services, infrastructure and safety. And we pay handsomely for those luxuries. Our income, real estate, personal property and everything we purchase is taxed. Even our death. Its absurd really.
I get a lot of questions about PMI being tax Deductible.
In 2016 approximately 43% of all purchases were made with down payments of 5% or less. WOW! This means a TON of you are paying PMI. And might be able to write off that expense.
Short answer… YES.
PMI is tax deductible.
Both the monthly premiums and the upfront. Which if you used FHA/VA/USDA to buy a home, the upfront portion is sizeable.
However as in all mail-in rebates, there is some fine print.
-Your Adjusted Gross Income (AGI) must be LESS than $109, 000 for married couples and $54, 500 if single.
-If your AGI is more than $100K (married) or $50K (single) then the deduction is reduced.
So what does this mean in Real #'s?
-Let's say you borrowed $200K on January 1st 2016 using an FHA Mortgage.
-And let's say your income limits meet the requirements notated above.
Tax Deductible PMI expenses as follows...
-Upfront $3500
-Monthly $141. 67 x's 12 months = $1700
-Total Tax Deduction of $5, 200
Always consult your CPA for specific Accounting advice.
I’m not a CPA. Own neither Khaki pants nor a Lincoln town car.
Just a friendly neighborhood Mortgage Broker dishing out candid advice.