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Buyers who can't put a 20 percent down payment on their home loan usually get stuck paying costly private mortgage insurance (PMI), which protects lenders if the buyer can't repay the loan.

But if you got a home loan after December 31, 2006, you're eligible to deduct your PMI premium from your taxes. According to the Tax Relief and Health Care Act of 2006, any PMI payments -- often $100 dollars or more per month -- can be deducted as mortgage interest when filling out Schedule A on the federal tax return.

In order to qualify for the full credit, your adjusted gross income (AGI) cannot exceed $100,000 ($50,000 dollars if married filing separately). The deduction is reduced by 10 percent for every $1,000 dollars of AGI you make over the limit, and disappears altogether at $109,000 ($54,500 if married filing separately). If you are paying a premium for mortgage insurance provided by the Veteran's Administration, Federal Housing Administration or the Rural Housing Administration, it is also deductible.

If you paid PMI premiums in a lump sum when you got your mortgage, you can deduct the portion of the sum you use each year on your tax return. You cannot deduct the entire amount in the first year of your loan.

Unless it is extended, the deduction is available for any mortgages that are originated before January 11, 2011.

Always consult your tax adviser. For more information about deducting mortgage insurance premiums, go to the IRS Web site.

Read FrontDoor.com's Top 10 Tax Tips for Homeowners:

1. Deduct mortgage interest and real estate taxes.
2. If you bought a home this year, deduct the points or origination fees.
3. For refinanced and second mortgages, deduct points equally over the life of the loan.
4. Deduct private mortgage insurance (PMI).
5. Deduct moving expenses if you moved at least 50 miles for a new job.
6. Up to $250,000 ($500,000 for married couples) is tax free when you sell your house.
7. Use home improvements and closing costs to offset your capital gains tax.
8. Exclude forgiven debt from taxable income.
9. Take advantage of energy efficiency tax credits.
10. Deduct damages to your home from disasters.

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• FrontDoor's Top 10 Tips and Advice on Everything Real Estate
• Search Homes for Sale
• First-Time Homebuyer's Guide
• Foreclosure Buying Guide
• Home Seller's Guide
• Home Finance Guide
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