Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Last year my girlfriend and I bought a house together in both of our names. Can I claim all of the mortgage interest and property taxes myself? I make more than she does and if she takes the standard deduction, she'll drop to a lower tax bracket. I think I can get over the standard deduction, but only if I can claim everything regarding the house for myself. Below is the only thing I could find regarding more than one borrower on a mortgage, Publication 936. If I'm reading it correctly, if I say I paid all the interest, I can deduct all the interest. I assume it'll be the same for property taxes but I'll look into that as well. The thing is, we set up joint checking account that we both put money into so there really isn't away to say who paid what. I thought I'd ask here before going to a professional.
More than one borrower.
If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line. Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13.
Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. Let each of the other borrowers know what his or her share is.
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Who made the mortgage and property tax payments? Where they made from a joint account? Were they all made from your account? This may be one of those things you should of thought of a year ago.
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As long as you are legally responsible for the payments, you can deduct them IF you paid them. But you need to establish an individual checking account for payments that are deductible such as mortgage interest, property taxes, charitable contributions etc. You could still effectively share expenses by having her pay for food, clothing, entertainment, utilities etc that are not deductible from the joint account. This is a tax advantage that married couples cannot utilize, ie one itemizes and the other takes the standard deduction.
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I would establish an agreement with her in writing which lays out who paid what, & what you are agreeing to with respect to taxes.
That way, she cannot file an amended form in 2 years & claim you misled her about how to fill out her form & that she in fact paid for half the household expenses,including property taxes, etc. (perhaps not directly, but through paying 100% of other things, in other words, you paid some things, she paid other things)
I've seen so many friends' relationships sour & people then get nasty.
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