Well, this is General Questions, and I can’t find anyone in my personal life that knows the answer, so I figured I’d try here.
If you jointly own a house with someone who files their taxes seperate from you, who gets the credit for the interest and real estate taxes you paid? Do you just split it in half? What’s the deal?
Thanks,
PeeQueue
Each person who owns the house has income. A portion of each person’s income pays the expenses you mention. So each person claims the part of their income that they spent. Dividing it evenly would disadvantage the person who paid more if there was one.
What I meant was is their a tax rule about this, or can I just do it any way I want? The other person is my fiancee so if it was up to us we would just give all the benefit to the person who earned the most.
Thanks,
PeeQueue
Well, PQ, does just one person send in his/her check for the Mort? Or do you each send in a check for 1/2? Usually, the guy, having the higher income, actually pays the Mort, with his check, and then the SO “helps out”. In that case, you could claim the entire deduction. But if you actually have the Mort in both names, and send in separate check- you must claim the proper share as paid. There is no hard & fast rule on this.
On the basis that the house is jointly owned and that each of you are liable for the loan.
Technically, the amount that each of you paid toward the interest and real estate taxes would be a deduction by each of you.
That may be difficult to establish based on how inter-mixed your finances are.
Download a copy of IRS publication 936. ** Home Mortgage Interest Deduction.** The key section is:
The lender will send you one form 1098 and it will only have one Taxpayer ID on it.
Well, I knew this was the right place to ask. I think all of the mortgage payments came out of my bank account, so it sounds like I can deduct the whole thing from my earnings, which is good. Some of the money might have come out of our joint bank account, but I think that will be okay.
Hopefully the 1098 will confirm this.
Thanks,
PeeQueue
The IRS is really not picky about married filing separately. They just want to be sure you don’t both claim the interest as a deduction. Divide it however you like. As barker’s cite shows, if the 1098 went to the other person, just write it in.
As a note PQ
You can call the institution that services your mortgage now. See what primary tax ID is listed. You can always ask them to change it if yours is not listed. Not all will make the change but they might.
Although this is not required, and it is perfectly legitimate to “transfer” the deduction as noted above; written notes and extra attachments to a tax return generally brings the return a higher level of attention.
It is always preferred to have a nice clean return that just chugs through the computers with little human intervention.
If you’re filing MFS, you also need to be careful about filing a Schedule A. Who ever files first determines how the other has to file. For example. If you file first and itemize, the other person has to itemize also. If they file first and use the standard deduction, you have to use the standard deduction.
If you’re both filing Single, barker’s advise is right on.
What country & state is this PeeQueue?
We have to file seperately as we’re not married yet. Of course, this is a good thing tax wise.
handy - we’re in New York.
All this advice is great.
PeeQueue