I understand the MFJ maximum is 750K and MFS is 375K. For argument sake, assume our mortgage is 750K and mortgage interest paid in 2024 is 60K. We are itemizing our deductions 50/50, so if MFS we would each claim 30K in interest. However, as MFS, we can only deduct interest up to 375K principal, so the software reduces the interest deduction to 15K. As a result, my spouse and I are each only able to claim 15K deduction (total 30K) if we input the full loan amount. If we were MFJ, then we would be able to claim the full 60K. I suppose this highlights one of the benefits of MFJ.
The question is, is it legal to split the outstanding mortgage principal in half, since we are 50/50 splitting our itemized deductions? Or are we tethered to the full amount since the loan has us both fully committed to the entirety of the mortgage loan? I hope I explained that clearly. Thank you!
