PMI: The new budget signed today, February 9th, extends the mortgage insurance deduction through the end of 2017. When will this be reflected in turbotax?

[rundhfamily12]

https://www.pwc.com/us/en/tax-services/publications/insights/assets/pwc-government-funding-agreement...

[ToddL · Accepted solution]

The IRS is reviewing the new legislation that retroactively extends and modifies numerous tax provisions covering 2017. The IRS will provide additional information as quickly as possible for affected taxpayers and the tax community.

TurboTax is also assessing these significant changes in the tax law but we will have to wait for the IRS before taking any next steps. 

It is entirely possible the IRS won't change their e-file filters and rules to accommodate these new tax provisions but, instead will require taxpayers to file paper returns to claim them.

For more information, see: Tax relief - The Bipartisan Budget Act of 2018

[SweetieJean]

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

[lowielow]

The e-file filters are already, in fact, updated on other software to now reflect the PMI as a deduction. Turbotax should update this asap in my opinion or will lose out on business. Turbo tax should expect many upset customers that have already filed following the 2/9/18 extension that were not given the most deductions possible.

[OutdoorProducts]

I feel the same way. Waiting for turbo tax to fix it or I'm going elsewhere. Is H & R Block updated? Can you tell me who updated it? Have a large amount of PMI and I want to claim it

[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 and other e-file providers 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 a month and a half 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.  It does not matter who you go to.

[ToddL]

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/6635123">https://ttlc.intuit.com/replies/6635123</a>

[jeffs]

I received an email this morning from TaxAct stating they have rolled out the majority of these changes in their product (Still missing energy credit). Hopefully, TurboTax will get this done soon.

[macuser_22]

@jeffs -  

TurboTax has been updated as of Feb 22 and the IRS is now accepting tax returns with the tuition and fees deduction, deduction for mortgage insurance premiums and the exclusion of cancelled debt on a primary residence.

[Rabrili]

Confirmed. I filed a return with TaxAct that had a Mortgage Insurance Premium and it is now showing that premium as a deduction.  That was one of the changes caused by the Bipartisan Budget Act.  Last week, TaxAct did not include as a deduction but now they do.

[jeffs]

@macuser_22 Great news. I will be completing my return tonight. Thanks!

[macuser_22]

@Rabrili - Right.  The IRS just updated the e-file system on Monday night (Presidents Day) to allow those forms to be e-filed.  E-file providers are updating accordingly.

[janisrae1957]

I received my corrected 1098 with now includes the mortgage insurance premiums. I filed with Turbo Tax and have received my refund.  What is my next step to get the MIP amended?  I need to know if this can be done now since my mortgage company has issued the corrected 1098

[smuscadin]

Have turbotax updated their software yet, I entered my PMI but I dont see any changes to my return.

[macuser_22]

@smuscadin  -  PMI is an itemized deduction.

Only if all itemized deductions exceed the standard deduction will it be of benefit.

For 2017 the standard deductions are:

Single or filing Married Filing Separately - $6,350
Married Filing Jointly or Qualifying Widow(er) - $12,700
Head of Household - $9,350

(If over 65 or blind add $1,250 - $1,550 if filing single or HOH)

Not all itemized deductions count the full amount.  Medical expenses are reduced by 7.5% of AGI so if your AGI is $30,000, for example, then only medical expenses more than $2,250 would be an itemized deduction.

Likewise for miscellaneous deductions such as union dues, work related expenses, etc. are first reduced by 2% of AGI.

For example, If your AGI is $30,000 then 2% is $600 so if your job related expenses were $650, then only $50 would become an itemized deduction.

Also Itemized deductions start to phase out if AGI exceeds $155,650.

You can check the actual amount of itemized deductions by using the Search Topics for "itemized deductions, choosing" (under "My Account, Tools" in the online versions).    Click on "Change my deduction". That will display the actual amount of itemized deductions vs. the standard deduction.    (Be sure to uncheck "Change my deduction" after checking it so you do not lock in the wrong deduction.)