We were told last year that we had to pay $5000.00 in interest before we claimed it on our taxes. Is this right?
2007-01-04 09:10:39 · 5 answers · asked by Lori F 1 in Business & Finance ➔ Taxes ➔ United States
PMI is deductable for tax year 2007 and, as of now, for 2007 only. It's too late to add it for 2006 but they may extend it for 2008 and beyond.....but who knows.
2007-01-04 09:31:25 · answer #1 · answered by Wayne Z 7 · 0⤊ 0⤋
No that is wrong.
Who in the world told you that "we had to pay $5000.00 in interest before we claimed it on our taxes?" were they high? Goodness! *sigh* *people make up all sorts of stuff don't they?
FACT:
You may only deduct mortgage insurance on property that you are using as a rental income property, Schedule E.
Your personal residence, the one you reside in...you may only deduct mortgage interest and real estate taxes, owed by you and paid by you for the 2006 tax year.
Please go see a reputable and educated tax professional. The source listed below will help you to find an enrolled agent in your area.
(EA's are licensed by the IRS and US Dept. of Treasury and must have continuing education every year, pass an extremely difficult IRS tax exam and adhere to a strict code of ethics to get and keep their license. Additionally, EA's are licensed to prepare taxes for Fed and all 50 states in the US. +)
2007-01-04 11:18:56 · answer #2 · answered by Meg 2 · 0⤊ 0⤋
Your lender will issue you a 1098 which will show the amount of mortgage interest you paid.
Whoever told you that you had to pay $5,000 in interest before you claimed it on your taxes is probably referring to the fact that for a single person, the standard deduction is $5,000 ($5,150 for 2006) and the standard deduction for married is $10,000 ($10,300 for 2006). If your itemized deductions (mortgage interest, property taxes, state income taxes, charitable contributions, etc.) does not exceed the standard deduction, then you are better off claiming the standard deduction.
2007-01-04 09:23:06 · answer #3 · answered by jseah114 6 · 1⤊ 0⤋
PMI cannot be deducted. Period end of discussion. Interest from your home mortgage on the other hand can be deducted in any amount, but you won't want to unless you exceed the "Standard Deduction" for your filing status. It sounds like you need that much ($5000) to break that barrier last year. Other deductible items that help reach that barrier are charitable contributions, state taxes paid, real estate taxes paid, and medical bills that are truly excessive. I am a professional tax preparer and do this for my daily bread.
2007-01-04 09:21:59 · answer #4 · answered by hdsok 2 · 0⤊ 0⤋
No, you cannot claim PMI (mortgage insurance) on your taxes. You can claim any amount of mortgage interest payment on your taxes, but this amount (plus any other itemized deductions) would have to be more than the standard deduction to make it worth it.
2007-01-04 09:14:04 · answer #5 · answered by Phoenix, Wise Guru 7 · 1⤊ 0⤋