My new husband and I are working on our income taxes (federal and Mass.). We are planning to file as “married filing jointly”, but we still live at different addresses due to my house not having sold.
There is only one place on the form for home address.
Do we just arbitrarily choose one? I couldn’t find any form for specifying a second address.
One potential issue is that I own my home and have paid property tax, mortgage interest, etc, but he rents (and in Mass. there is a rental deduction). This is fine but will questions be raised if the “wrong” address is listed as the home address?
Yes I may do that, but I did look through their web site and didn’t find anything relevant. So I thought perhaps someone here may have had the same problem.
The opinions you get from the IRS when you call with questions carry exactly the same amount of weight with the IRS as the opinions of an “anonymous message board”. The IRS makes no warranties that any information they give you is correct.
They don’t check that the address you list on page 1 of Form 1040 is the same as the address for a property for which you claim deductions on Schedule A. It is perfectly valid to live in one property and take deductions on a different property.
I would use his MA address on both the 1040 and MA Form 1. MA may care that the address is your primary residence when you claim the rental deduction.
If that be the case, run several tests to determine which address gives the bigger refund. On preview, perhaps determining one address is a primary and one address is a secondary for tax purposes.
The Feds may not care, but would the State care if ratatoskK & Hubby claimed homestead on the “owned” home but claimed the “rented” as primary residence? Doesn’t the ‘homestead’ one have to be the primary residence?
I’ve also wondered about that. But each residence is truly the principal residence of one of us separately. He’s lived in his for 20+ years and it’s been almost as long for me where I live.
Which proves the point as to why would anyone seek tax advice from an anonymous message board. My first advice was to contact the IRS. Notwithstanding any disclaimer that such advice may be as meaningless as here, ymmv. FWIW, contact the relevant tax authorities, be it the IRS and/or the State of Massachusetts. Neither may offer accurate nor binding advice so any response it meaningless wherever you go, including here. Married filing separately makes sense but one incurs the marriage penalty. Oh well. That’s life.
The main reason the IRS wants the address is to get in touch with you. They really don’t care where the address is that you pay taxes and a mortgage on, as long as you calculate your deductions correctly.
Schedule A, where most people list their deductions on their homes, has no line where you have to even give an address. All the IRS cares about is that you have proper documentation for the deductions. Since one residence is a rental, there’s no issue about a second home.
And, you must understand that the IRS is not unreasonable. If you’re entitled to the deductions, you get them. If called in for an audit, you may have to explain your situation, but they don’t go crazy over a mistake over a complicated situation. You’d have to pay interest on the additional amount you owe, but if there’s no real intent to defraud, they’re likely to waive any penalties. A tax advisor once said to me, “if you can justify a deduction, take it.”
The issue with Massachusetts is a little more complicated. Assuming both houses are in Massachusetts, you can only choose one, anyway, and I bet using the house you own is going to get you a bigger deduction than choosing the place you rent. However, judging by the rule in NinetyWt’s post, you may even be able to justify both deductions. Or you can just play it safe and use the house you own (since that’s what you’d want to use for the IRS).
Taxes are really not that hard. People tend to get all afraid that they might make a mistake and go to jail, but the IRS is primarily interested in getting their money, and if it’s an honest mistake in a confusing situation, they don’t mind being flexible.
Have you looked into what happens if you file seperately? I have zero answers for you, but would that allow you to each claim your seperate residences?
We may test that and see if there’s any advantage to it (filing separately). But our incomes and everything else are pretty similar, so the rule of thumb would be to file jointly.
When my wife and I were in the same situation, we decided whichever of us was doing the taxes would be the address. It worked fine. No complaints from the IRS.
For anyone who’s curious, my husband just phoned the IRS and Mass. to ask about this.
IRS confirmed that the address we enter on the 1040 is just for correspondence and has nothing to do with the real estate taxes, primary residence, etc. So it’s fine to choose either one.
Mass. said it’s OK for us to get both the real estate deductions and the rental deduction, since we live apart. They said the return may or may not be “flagged” if we file electronically because we are taking both deductions. They said that if it’s flagged, all they do is ask us for more info about why we filed it that way. (Electronically, there’s no way to add a note offering this info.)
Thanks to everyone who chimed in with information!