(Closed) Does PMI deduction on tax return make a difference?

posted 3 years ago in Finances
Post # 2
Member
14090 posts
Honey Beekeeper
  • Wedding: November 1999

It depends on his income if it’s worth it.  The PMI deduction helps lower income earners.  A google search says that its phased out if your AGI is over $109,001 (or $54,501 if married filing separately).  DH and I have never qualified for the PMI deduction so I can’t say it would be worth it for us to do extra paperwork and possibly pay more money to the tax preparer, but it could help, I guess. 

Post # 3
Member
3672 posts
Sugar bee
  • Wedding: July 2018

I’m legally single and own my own home and the PMI deduction definitely helped. Every bit that gets you above the standard deduction is money right back in your pocket. Maybe you make too much money for it to help? I’d try running it on Turbo Tax or something to see.

Post # 5
Member
3672 posts
Sugar bee
  • Wedding: July 2018

View original reply
bellanotte11 :  did his tax guy use the standard deduction?  If you don’t have enough individual deductions (PMI, student loan interest, charitable donations, IRA contribution, etc) to add up to more than the standard deduction, then none of those line item individual deductions really matter because you just go with the standard deduction.  That’s my understanding at least – I just started doing my own taxes a few years ago at age 33 lol.  Last year I did the standard deduction, this year I realized that all my individual deductions added up to more than the standard deduction so I did that.

Post # 6
Member
15514 posts
Honey Beekeeper
  • Wedding: June 2011

If you qualify for the deduction, I usually estmiate a savings of about 25-30% for deductions.  $800 deduction is basically saying you made $800 less, so you pay taxes on $800 less of your income.  So whatever top bracket of your tax rate * $800 would be your savings. 

Post # 8
Member
5077 posts
Bee Keeper
  • Wedding: December 2014

I can’t imagine it would have no effect at all, but it may not be worth the trouble, especially if you have to pay your tax guy another fee. 

A quick google search showed that TurboTax added PMI to the mortgage interest deduction section on 2/22. Did you try them after that? 

ETA: If it is worth it, but your tax guy wants to charge another fee, it’s not that difficult to amend your return yourself on paper for free… I did it last year when I forgot to tell our tax guy about a credit we were supposed to get. 

Post # 10
Member
650 posts
Busy bee

 I mean it is just a deduction from income. But I don’t care if its a dollar or $800…. takes 5 seconds to include the deduction towards your taxes… Ridiculous to charge you. But I guess it is technically a corrected refund! Not sure.

 

Post # 11
Member
9437 posts
Buzzing Beekeeper

View original reply
bellanotte11 :  he should absolutely not charge you and he should fix it. HE is the tax professional and he gave you incorrect advice. That is an extra $800 you shouldn’t pay taxes on, and in the 25% bracket means an extra $200 in your pocket. He’s being lazy. 

Post # 12
Member
1011 posts
Bumble bee
  • Wedding: September 2018

If he’s not over the income limit and he qualifies for itimized deductions then he can claim it. 

If the tax preparer made the initial mistake then they should correct their own mistake without charging you! 

Post # 13
Member
170 posts
Blushing bee
  • Wedding: June 2018

Didnt even know the PMI deduction had come back! Thanks for the heads up! 

Post # 14
Member
104 posts
Blushing bee

As someone who does taxes for a living, although not individuals, this fix and an amendment will take him 15 minutes tops. He should definitley not charge you. As a tax practitioner it is his job to stay up to date on current laws, deductions and credits you qualify for, etc. If he failed to do that, he is responsible and can easily ammend! I would expect and additional $200 refund for federal. 

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