Senate Passes Bill With MI Deduction

The Senate has passed by a 92-5 vote a huge tax bill called the Jumpstart Our Business Strength Act that includes a temporary one-year deduction for mortgage insurance premiums.The JOBS bill (S. 1637) is considered must-pass legislation to repeal U.S. export tax incentives that are considered illegal by the World Trade Organization. But it has become a huge magnet for special-interest tax provisions, and Senate leaders agreed to include an MI deduction amendment, sponsored by Sen. Gordon Smith, R-Ore. Under the Smith amendment, homeowners with incomes of up to $100,000 would be able to deduct all their mortgage insurance premiums paid during the 2005 tax year. Like many new tax provisions, the deduction expires after one year. The House has not passed a similar tax bill. However, 23 members of the House Ways and Means Committee have co-sponsored an MI deduction bill (H.R. 1336) that is similar to the Smith amendment.