Yes, even with your SSN on the 1098 and just her name, she would be able to enter it on her return.
However, a few things first. She can only claim the portion she paid. So, if she paid, half and you paid half, she can only claim half of the mortgage interest.
Second, mortgage interest isn't a self-employed tax break in general. If she is using part of the home as a home office, then she would be able to take a prorated deduction for the interest paid, but could not claim all of the interest paid as a business expense. For example, if your home is 2,000 sq. ft and she is using 200 sq. ft for her home office, and your mortgage interest for the year was $5,000, then she would be able to claim 10% of the $5,000 or a total of $500 for the self-employed deduction.
The rest of the mortgage interest would be able to be deducted as an itemized expense if her total itemized expenses (NOT business expenses) are greater than her standard deduction. Itemized expenses include mortgage interest, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss. Your health insurance and all medical expenses are only deductible for the amount that is over 7.5% of your AGI. This means if your AGI is $50,000, then the amount that is over $3,750 is deductible.
Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your insurance premium payments.
The 2023 Standard Deductions are as follows:
- Married Filing Joint (MFJ) $27,700
- Married Filing Separate (MFS) $13,850
- Head of Household (HOH) $20,800
- Single $13,850
Blind and MFJ or MFS add $1,500
Single or HOH if blind add $1,850
Third, Itemized expenses will reduce your federal taxable income but not reduce self-employment taxes. Self- Employment taxes are calculated separate from your regular income tax or your AGI. They are based on business income. So, if you enter the itemized expenses and it reduces your AGI to $0, but your SE income was $10,000, you would still have SE taxes on that $10,000 which would be $1,530.
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