New Homeowners Enjoying Mortgage Insurance Premium Deduction on 2007 Tax Returns |
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Written by U.S. Insurance News
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Sunday, 30 March 2008 |
April 15 might not loom as a dreaded deadline this year for new homeowners.
Thanks to a law Congress passed in late 2006 for purchasers of home loans that closed in 2007, many Americans will find a nice little addition to their tax returns this year.
That law allowed families with an adjusted gross income of $100,000 or less to deduct the full cost of their government or private mortgage insurance premiums on their federal tax returns. In addition, families with incomes between $100,000 and $109,000 are eligible for a reduced deduction.
This year won't be the only year home buyers can benefit from the law. As part of the Mortgage Forgiveness Debt Relief Act of 2007, Congress voted to extend the mortgage insurance tax deduction through 2010.
"For the first time, many low- and moderate-income families who purchased homes with private or government mortgage insurance will be able to deduct those premiums when they file their 2007 federal tax returns next month," noted Kevin Schneider, president of the Mortgage Insurance Companies of America (MICA).
Schneider stated that the average tax break could be about $350 per taxpayer. And in a sluggish housing market, any tax break is welcomed.
"Even with home prices declining, many families still find it difficult to accumulate a 20 percent down payment," said Suzanne Hutchinson, MICA's executive vice president. "Low down payment insured loans are a key financial tool in the overall effort to keep the dream of homeownership alive in a volatile market." |
