Can I add my prepaid, amortized mortgage insurance premium on my FHA loan to the amount the 1098 shows in box 5 to include in Turbo Tax as the amount for box 5?

[mchrains]

In August, 2017 I purchased a home under an FHA loan. In Feb. 2018 the government extended the deduction for the mortgage insurance premium. It is my understanding that the total amount prepaid has to be amortized over 84 months and I can only claim 4 months worth for 2017 plus any additional monthly payments I made. The amount shown in box 5 of the 1098 for 2018 shows ONLY the payments I made as part of my monthly mortgage payments, and not 12 months worth of the amortized mortgage insurance premium. Am I correct that I take the amount in box 5 of the 1098 and ADD 12 months worth of the prepaid mortgage insurance premiums to that and enter than in Turbo Tax in the box allocated for "box 5?"

[Opus 17 · Accepted solution]

It doesn't matter, since the deduction has not been extended by Congress to cover the 2018 tax year.  It was left in the program "just in case", but I don't think Congress and the President are in a cooperative mood this time.

I think the answer is yes, that's how you would have to do it, because Turbotax doesn't have a place for "Additional mortgage insurance premiums."  You can enter the amount and, IF the deduction is turned back on, it will be added to your tax return.

[mchrains]

Thank you. For 2017 amended return I took the prepaid amount for 4 months of the amortized prepaid amount and added it to the monthly payments made in 2017 and put that in box 5 instead of the entire amount shown in that box (the bank did not "amortize" the prepaid amount) and am filing an amended return for 2017 tax year.  HR 284 apparently has been introduced on the floor of the House to be a permanent deduction of MIP but has not gone anywhere as of 2/19/2019.

[Opus 17]

Turbotax has never automatically handled the amortized part of PMI/MIP, that has always required a manual entry by the taxpayer.  

[mchrains]

It just asks for the amount in "box 5" of the 1098. However, the information from the lender did not accurately fill that box. So, had to recalculate and use that figure in Turbo Tax.

[Opus 17]

Lenders often don't as well.  If you closed with a mortgage originator who then sold the loan to a different lender, the new servicing company won't have the information on the lump sum premium.

[natural-52]

I have same issue and I understand that 2021 tax code had added the mortgage insurance premium?

[Opus 17]

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@natural-52 wrote:

I have same issue and I understand that 2021 tax code had added the mortgage insurance premium?

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MIP or PMI is allowed for 2021, subject to an income restriction of $100,000 for most taxpayers and $50,000 for married filing separately.  You can deduct monthly premiums listed on your 1098 (if you pay a monthly premium) and you can deduct an amortized amount of any lump sum to paid at the closing, as long as it is less than 84 months since the closing.