Numerous tax provisions including the mortgage insurance tax deduction will expire Jan. 1 because Congress did not pass its annual tax extension bill before the lawmakers left town Dec. 23.
The tax writers are planning to pass a tax extension bill some time in 2012 that will be retroactive to January 1.
However, the extension of the MI tax deduction may not be automatic this time. That's because tax writers might have to come up with new revenues to pay for the $35 billion tax extension package.
In terms of revenues, "the low hanging fruit is long gone," one congressional expert said. "So the tax folks may not be able to extend all the tax provisions" in 2012.
Homeowners filing tax returns for 2011 will be able to deduct mortgage insurance premiums. The deduction covers premiums paid for private mortgage insurance and for Federal Housing Administration-insured loans.
Homeowners also deduct funding fees paid on Department of Veterans Affairs loans and guarantee fees paid on Rural Housing Service loans.
