Va funding fee .Can we deduct this and where is located at turbo tax

[ToddL]

Removed - see answer posted below

[Opus 17 · Accepted solution]

Update for 2017 taxes.  The deduction for mortgage insurance premiums, was restored by the budget act of February 8, 2018, retroactive to 2017.  The IRS allowed submission of returns containing this deduction starting on Feb 22, and Turbotax has been updated to allow the deduction as of Feb 22.

Turbotax changed the mortgage insurance interview, it's not a separate section any more.  It's part of the 1098 interview for mortgage interest.  If you paid a VA funding fee to the current lender, they are supposed to put it in box 5 of the 1098 form they send you and you would enter it when you enter your mortgage interest.  If you closed with a different lender and they transferred the loan to a different lender for servicing, then after you enter your 1098, enter a second mortgage lender and check the box for "I did not get a 1098 from this lender", and enter the VA funding fee in box 5 for mortgage insurance premiums.

Note that mortgage insurance premiums are only deductible if you meet certain income limits.  The VA funding fee is fully deductible in the year you close if you meet the income limits.  Other types of mortgage insurance must be spread out over 7 years.

[ToddL]

Thanks!

[Opus 17]

Since this question got a vote in January 2018, I need to update it. The mortgage insurance deduction, including the VA funding fee, expired at the end of 2016. It is not available on your 2017 tax return and has been removed from TurboTax.

 It is part of a package of tax measures called the "Extenders", which is under consideration in Congress, but which is not moving at the present time.

[ToddL]

Actually, could you edit/update the answer (it's yours)? Just in case a user doesn't read these comments.

[Opus 17]

Or should it just be archived?  @TurboTaxGabi ?

[ToddL]

The only reason to keep something like this out in AXC is for amending PY returns.

[bj1926]

found this on the Turbo tax blog.  <a rel="nofollow" target="_blank" href="https://blog.turbotax.intuit.com/tax-reform/government-shutdown-averted-and-tax-provisions-providing...>

[bj1926]

this article says otherwise... found this on the Turbo tax blog.  <a rel="nofollow" target="_blank" href="https://blog.turbotax.intuit.com/tax-reform/government-shutdown-averted-and-tax-provisions-providing...>

[Opus 17]

Yes, the tax law changed again after the answer was updated. However, there is no word from the IRS on when they will be reprogrammed to accept the deduction, and no word from TurboTax.

 Generally, the IRS must approve changes to the forms and instructions and reprogram their computers, then they release the changes to tax software companies.    It is possible that it will be weeks or a month or more for the changes to be implemented. It is also possible that since so many customers have already filed their tax returns, the IRS might allow a retroactive deduction next year instead of reprogramming their computers this year.

At this point nobody knows. You can either file without the deduction,  and maybe amend later, or wait and see what happens.

[Opus 17]

Update for 2017 taxes.  The deduction for mortgage insurance premiums, was restored by the budget act of February 8, 2018, retroactive to 2017.  The IRS allowed submission of returns containing this deduction starting on Feb 22, and Turbotax has been updated to allow the deduction as of Feb 22.