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Don't deduct home insurance, but …
Don't deduct home insurance, but … © iStock

Don't deduct home insurance, but …

The hazard policy you bought to cover damage from fires, tornadoes, hurricanes, winter storms and other disasters, as well as for more routine mishaps, offers peace of mind. What it doesn't provide is a tax deduction for the insurance premiums.

But if you meet some tax law guidelines, you can deduct private mortgage insurance, or PMI, on your 2015 tax return. PMI is the insurance your lender requires you to buy if you don't put down a big enough down payment. PMI premiums are deductible as an itemized expense (it goes on Schedule A with your mortgage interest claim) as long as the mortgage insurance policy was issued in 2007 or later. The 2016 tax year is the final one for this deduction unless Congress extends it.

You also must meet income requirements. If your adjusted gross income, or AGI, is $100,000 or less (or $50,000 if you're married and filing separately), your full PMI premium amount is deductible. If you make between $100,001 and $109,000, the amount of PMI that you can deduct is reduced. And if your income is more than $109,000 ($54,500 married filing separately), you can't deduct PMI at all.

You can figure your allowable PMI deduction using the worksheet in the Schedule A instructions.

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