Is the VA Home Loan Funding Fee deductible?

[DoninGA]

Yes, the VA Home Loan Funding Fee is deducible on your tax return.  It is entered on Schedule A as an itemized deduction for Mortgage Insurance.

Enter mortgage insurance in the Search box located in the upper right of the program screen.  Click on Jump to mortgage insurance.

The total of all your itemized deductions on Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2021

• Single - $12,550 add $1,700 if age 65 or older
• Married Filing Separately - $12,550 add $1,350 if age 65 or older
• Married Filing Jointly - $25,100 add $1,350 for each spouse age 65 or older
• Head of Household - $18,800 add $1,700 if age 65 or older

[HelenC12]

Yes, the VA Home Loan Funding fee is deductible. It's essentially Mortgage Insurance Premium (MIP).

• Enter the MIP when you enter your Form 1098-Mortgage Interest. Enter it in Box 5-Mortgage Insurance Premiums..
• Can I deduct private mortgage insurance (PMI or MIP)?

Source:JoannaB2

[Opus 17]

However, there is an income phase out. The deduction is reduced if your income is more than $100,000 (or 50,000 married filing separately) and is eliminated if your income is more than $110,000 ($55,000 for married filing separately). If you enter the VA funding fee as a lump sum mortgage insurance premium, TurboTax will do the calculation for you.

[econ_guy]

Thank you Opus 17. I couldn't understand why TurboTax was deleting this deduction until I saw your post.