Congress just passed mortgage insurance premium deductions for 2017 and President Trump just signed it into law. I already filed, how do I take advantage of this?

[ToddL · Accepted solution]

You will have to file an amended return to take advantage of the mortgage insurance premium deduction for 2017.

For instructions, see the TurboTax FAQ - How to Amend (Change or Correct) a Return You Already Filed

[lincolncoe]

When will TurboTax be updated to allow Mortgage Insurance Premiums to be deducted?

[ToddL]

We won't be able to update TurboTax until the IRS updates their programs to show that PMI and other deductions were extended.

[macuser_22]

The tuition and  fees deduction, PMI, energy credits and other deductions  expired on Dec 31, 2016 and were not renewed by Congress in the December tax bill, however, in the The Bipartisan Budget Act of 2018 that was signed into law on Feb 9th those deductions and others were made retroactive for 2017.

Before you can add any of  those deductions the changed forms must be updated to comply with the new law.  That might take a while.  The IRS must write the new rules, issue electronic specifications for the new forms and approve them before TurboTax can add them.  If history is any guide, that process can take 1 to 2 months.  It usually takes TurboTax 10-14 days after the IRS issues the specifications.  (It  took the IRS from December 22, 2016 to Feb 15 - still waiting - , to approve  some the forms that the Dec tax law changed.)

The IRS says:  
<a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/irs-statement-on-retroactive-extender-provisions">https://www.irs.gov/n...>

Nothing can be done until the IRS acts and issues the new form specifications.

[cel64]

Any word on when the IRS will act so that TurboTax can change forms?  I am holding off on finishing my taxes until then assuming it will be before April 15th.

[macuser_22]

I would not hold my breath.    Nothing on the IRS site about it.

[ToddL]

Today, from the IRS:

We learned that the IRS will enable e-file for the below provisions by Monday, February 19th, and update their systems on Sunday, February 18th to include these extenders. Intuit’s Individual TurboTax and ProSeries Federal products will release by Thursday, February 22, to address the known federal changes.

Extenders:

·         Sec. 40201.  Extension of exclusion from gross income of discharge of qualified principal residence indebtedness.

 ·         Sec. 40202.  Extension of mortgage insurance premiums treated as qualified residence interest. Note, IRS has already enabled the associated business rules; they can now accept these returns.

 ·         Sec. 40203.  Extension of above-the-line deduction for qualified tuition and related expenses.

The IRS plans to:

·         Sync e-file with associated changes to Forms and Schedules as much as possible and as soon as they can.  Most of those associated with the provisions will be available by February 22, including Form 1040. For some, including Form 8917, IRS projects they will be available by March 2.

 ·         Continue to assess Form 4684.  They will share their plan when ready (soon).

 ·         Enable the tax provisions for families and individuals first.

 ·         Continue to assess the impact of the disaster provisions, both for the California Fires and additional relief for taxpayers impacted by Hurricanes Harvey, Irma and Maria, as well as the credits and business incentives also extended by the Act.

[Opus 17]

Turbotax was updated to allow the deduction for mortgage insurance premiums as of February 22, 2018.  It's included in the entry for mortgage interest.

Remember that the usual rules still apply: there are income limits, and pre-paid lump sum amounts must be spread out over 84 months, you can only deduct the number of months worth that you paid in 2017.  (Up front lump sum amounts for the VA funding fee and Rural Housing Authority are fully deductible, and monthly premiums are fully deductible.)

Other provisions of the budget act have not yet been approved by the IRS.

[mcconnellj]

This does not seem to be working in the software. I went in to amend and it is not making any changes to my return.

[Opus 17]

If you entered a PMI deduction and it does not change your tax owed or refund or does not change your amended return, you may be ineligible for the deduction.  It is phased out at incomes higher than $54,500 (married filing separately) or $109,000 (all other filing status) -- it is also an itemized deduction and your total itemized deductions must be more than the standard deduction before you can benefit.