Just a reminder: Your Mortgage Insurance (MI) may be tax-deductible!

First a disclaimer: I cannot give tax advice. You should consult with your CPA or tax adviser to determine if you're eligible to take this deduction.

For those of you who have yet to file their income tax return...this one's for you:

Borrower-paid MI (whether monthly, single premium or split premium) is tax-deductible through the year 2013. This provision was part of the American Taxpayer Relief Act of 2012. This deduction will apply to your primary residence and a non-rental second home. The mortgage loan that qualifies is one that was used to purchase or refinance said homes. (Refinances are only eligible up to the original acquisition indebtedness.)

Qualifying for this deduction is based on your Adjusted Gross Income (AGI). Note: AGI is calculated before your itemized deductions. For households (single OR Married, filing jointly) with AGI of $100,000 or less the deduction is 100% of their MI premiums. This deduction is reduced by 10% for each additional $1,000 of household AGI. The deduction is completely phased out at the $109,000 mark. For married individuals filing separate returns whose AGI is $50,000 or less, the deduction is 50% of their MI premiums. The deduction is then reduced by 5% for each additional $500 of AGI, phasing out completely after $54,500.

Why is the deduction helpful, you ask yourself? Simply put: It reduces your overall taxable income in the same way as mortgage interest! And, therefore, reduces your payable income taxes.

I don't want any of my clients to miss out on this deduction; so be sure to check with your tax preparer for more information on if this applies to you.