The mortgage insurance tax deduction for private mortgages has been extended for another year to help generate more homebuyers. The previous deduction was set to expire but has now been extended.

This deduction allows you to deduct all of your mortgage insurance premiums. The amount of your monthly insurance premiums will depend on the amount you have borrowed to purchase your home. There are some guidelines to qualify for the home mortgage insurance deduction:

• Your income must be less than $100,000.00 annually for individuals.

• Your home must be purchased between January 1, 2007 and December 31, 2010

• If you earn more than $100,000.00 then you can still take a partial deduction.

This deduction will help many low income families to afford homes and to be able to afford insurance as well by allowing bigger home related deductions then ever before. The average mortgage insurance deduction can save families $200.000-$400.00 every year that they own the home. This can add up to huge savings over the years that the home is owned.

If you are a new homeowner and you have prepaid insurance premiums you may also deduct this entire amount. If you own a second home then you may not deduct the insurance premiums on that home. This deduction only applies to your primary residence.

Don’t forget all of the other great deductions available for homeowners such as loan origination fees, property taxes, and mortgage interest paid. Itemizing your tax return can help you take advantage of all of the great deductions.

To itemize your tax return this year, visit TurboTax Online.