Can I deduct up-front Mortgage Insurance for a FHA loan for a house bought in 2017

[rpratheepkumar]

I bought a house through a FHA Loan in April 2017, and I paid around 9800$ as up-front Mortgage Insurance Premium.

How can I claim this as a deduction for the year 2017

[Opus 17 · Accepted solution]

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.)

Also note that the mortgage insurance deduction was only extended through the end of 2017.  You can deduct part of your lump sum this year (for example, if you made 6 mortgage payments you could deduct 6/84ths of $9800, which is $700) but you won't be able to deduct it next year unless Congress extends the tax break again in another finance or budget bill.

[Charlie-Lunan]

So if I paid $4,911 in upfront PMI premiums on a new loan in 2017, I can deduct 1/84 of that in addition to the monthly premiums I paid and which the lender reported in Box 5 of my 1098?

[Opus 17]

You would deduct x/84ths where x is the number of payments you made in 2017.  If you closed June 30, and your first payment was August 1, then you would deduct 5/84ths of the up front amount, plus the total of your monthly premiums.

[mbarredo1]

what if i refinanced to a conventional loan in 2017? can i deduct all the remaining months (eg. 65 mos)?

[LeeM]

Unfortunately not, as of tax year 2017, homeowners are no longer able to deduct mortgage insurance premiums.

The mortgage insurance deduction was introduced in 2006, and was last extended through December 31, 2016 by the 2015 Protecting Americans from Tax Hikes (PATH) Act. It was not extended for 2017.

[mich1070]

So what happens if I didn't get to fully deduct it over the 84 months?  I just lose the remainder of the deduction now? I understand the monthly amount paid in 2017 isn't deductible anymore or a new upfront PMI paid in 2017 wouldn't be, but what about the carryover for the upfront from a prior year that wasn't fully "depreciated"?

[dyannantuono]

Depending on your tax situation this may get absorbed by the newer standard deduction. If this was an investment property, the answer may be different

[ktmyers101406]

PMI paid is deducted in the year it was paid. You shouldn't have a carry forward for PMI. If you're over the income limit for the PMI deduction then you just don't get to deduct the remaining you paid.

[mammyack]

It is Upfront PMI that is paid at closing and it is NOT deductible in the year of payment.  It is (was) deductible over an 84 mo. period or life of the loan, whichever was shorter.

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[laurie2]

The budget bill that was signed by the President on 2.9.18 puts back the mortgage insurance premium deduction for the 2017 tax year.  Waiting for news on "where to deduct it",... there's no line for it.

[chrever]

Me too! Waiting.....

[mbearmandavid]

I am waiting as well. Let us know so we can claim the deduction and wrap this year’s filing up. Thank you

[bhouchin71]

Me too!  IRS Publication 936 said to spread Prepaid Mortgage Insurance over 84 months.  My 84 months is not up until fall of 2019.  What should I do?

[jjomfs]

What if I already filed without deducting mortgage insurance this year? Can I go back and amend?