Can You Write Off PMI in 2020?

Private mortgage insurance (PMI) is a type of insurance that protects the lender in the event that the borrower defaults on their mortgage. PMI is typically required when the borrower makes a down payment of less than 20% of the home’s purchase price. The cost of PMI can vary depending on the loan amount, the loan-to-value (LTV) ratio, and the borrower’s credit score.

In the past, PMI premiums were tax-deductible for homeowners who itemized their deductions. However, the Tax Cuts & Jobs Act of 2017 eliminated the PMI deduction for new loans originated after December 15, 2017.

Can You Write Off PMI in 2020?

The answer to this question is yes, but only if you meet certain requirements. To be eligible for the PMI deduction, you must meet the following criteria:

• You must have taken out your mortgage before December 16, 2017.
• You must itemize your deductions on your tax return.
• Your income must be below certain limits.

How Much Can You Deduct?

The amount of PMI that you can deduct is limited to the amount of PMI that you actually paid during the year. You cannot deduct any PMI that you prepaid or that was included in your mortgage payments.

How to Claim the PMI Deduction

To claim the PMI deduction, you must itemize your deductions on your tax return. You can do this by completing Schedule A (Form 1040), Itemized Deductions. On Schedule A, you will need to report the amount of PMI that you paid during the year on line 10.

The PMI deduction can be a valuable tax break for homeowners who meet the eligibility requirements. If you are eligible for the deduction, be sure to claim it on your tax return.

Additional Information

• The PMI deduction is not available for loans originated after December 15, 2017.
• The PMI deduction is phased out for taxpayers with incomes above certain limits.
• The PMI deduction is claimed on Schedule A (Form 1040), Itemized Deductions.

FAQs

Q: Can I deduct PMI if I refinanced my mortgage after December 15, 2017?

A: No, you cannot deduct PMI on a refinanced mortgage if the original loan was originated after December 15, 2017.

Q: How do I know if I am eligible for the PMI deduction?

A: To be eligible for the PMI deduction, you must meet the following criteria:

• You must have taken out your mortgage before December 16, 2017.
• You must itemize your deductions on your tax return.
• Your income must be below certain limits.

Q: How much PMI can I deduct?

A: The amount of PMI that you can deduct is limited to the amount of PMI that you actually paid during the year. You cannot deduct any PMI that you prepaid or that was included in your mortgage payments.

Q: How do I claim the PMI deduction?

A: To claim the PMI deduction, you must itemize your deductions on your tax return. You can do this by completing Schedule A (Form 1040), Itemized Deductions. On Schedule A, you will need to report the amount of PMI that you paid during the year on line 10.