Hi, my wife and I reside in North Carolina and file our taxes as married filing separately (beneficial for her PSLF loan forgiveness program). We took out a mortgage that is only under my name but both names are on the deed/title and we both contribute "equally" towards the expenses from our join account. I also took a home equity loan on this home for home improvements that are both paying back. My understanding is that we divide the mortgage interest by half, but do we divide the outstanding principal in Box 2 by half as well? If we don't divide principal by half, we lose out out on the full benefit as the total principal is $550k (470k for original loan and 80k for home equity) but dividing by half, gives us full benefit.
