Can you deduct home owners insurance taxes

Mortgage insurance premiums are entered on Schedule A.

The Internal Revenue Service (IRS) allows homeowners and investors to deduct qualified homeowners insurance premiums from their federal income taxes. Deducting the expenses is fairly straightforward; determining which premium payments qualify for deduction and calculating the total amount of paid premiums is the most complicated part of the process.

Study the specific law regarding homeowners insurance deductions. Homeowners insurance provided by the Veterans Administration and the Federal or Rural Housing Administration, in addition to insurance policies from private companies, usually qualify for deduction. Prepaid mortgage can only be deducted for the amount incurred in the previous tax year. In order to qualify for deduction, the policy must be taken out for the purpose of buying, building or significantly improving a house.

Contact your homeowners insurance carrier and request a statement of all premium payments you have made in the previous tax year. Call your agent if you deal with a local representative. Your insurance company should be able to send you a statement of payments through the mail, fax or email.

Gather all financial documentation you have kept to show proof of mortgage insurance premium payments, including receipts, copies of checks and accounting system records.

Compare your records with your insurance carrier's records to ensure their accuracy. Contact your insurance company and bank to investigate any discrepancies. Note the dates of all payments recorded on the statement from the insurance company, and compare them with recorded outflows from your bank account.

Obtain a copy of IRS Form 1040, as well as Schedule A, “Itemized Deductions.” (See Resources.)

Add up all the premium payments made over the previous tax year, and enter the total amount on line 13 of Schedule A. Submit Schedule A with your completed Form 1040 at tax time.

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