Did we lose these tax breaks in 2017

by Property Management Software on January 1, 2017

Real estate tax breaks

Real estate tax breaks

For millions of moderate-income homebuyers, there’s an important money-saving question looming in 2017:  Will Congress reinstate deductions for mortgage insurance premiums as part of its overhaul of the federal tax code?

Depending on your situation as a buyer or owner, it could mean thousands of dollars in tax write-offs. Mortgage insurance premiums are charged by lenders when borrowers make less than a 20 percent down payment. In one form or another, they are an integral part of all Federal Housing Administration, Department of Veterans Affairs and low-down-payment loans eligible for sale to investors Fannie Mae and Freddie Mac. During the past year, 43 percent of all home purchases were made with down payments of 5 percent or less, according to analytics firm CoreLogic — often by millennials, first-timers and minority buyers.

The insurance premiums compensate lenders and bond investors for the added risks associated with small down payments, and they often range anywhere from $100 to $200 or more a month. Under current law, these premium charges can be deducted on eligible borrowers’ income tax filings, along with mortgage interest. During 2014, the most recent year for which the IRS has statistics, mortgage insurance premium deductions were claimed by 4.2 million homeowners. Since the right to take full premium write-offs is restricted by law to borrowers with incomes of $100,000 or lower, the benefit is targeted at nonwealthy families and is off-limits to everybody else. Roughly 40 percent of all taxpayers who filed for the deduction in the latest year had incomes of less than $75,000.

How did this tax break work? CLICK HERE

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