Mortgage

[dah2410]

My husband, myself and my non-dependent son have our names on a mortgage for a condo that he is living in while attending school.  How do my husband and I account for it since he is paying the mortgage?  Secondly, how does he account for it?

[xmasbaby0 · Accepted solution]

If all of your names are on the mortgage, any of the three of you can enter the mortgage interest on your tax return.  Since your son is paying the mortgage, perhaps he should use it.  Work it out among yourselves.  It might not make any difference who enters it unless you have enough itemized deductions to exceed your standard deduction.

HOMEOWNERSHIP DEDUCTIONS

It is very hard for a lot of people to use itemized deductions now that the standard deduction is so much higher.  Your home ownership may not have any effect on your tax due or refund, especially if you purchased the house late in the year.  

Standard Deduction
Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes. 

2019 Standard Deduction Amounts

Single $12,200   (+ $1650 65 or older)

Married Filing Separate  $12,200   (+ $1300 if 65 or older)

Married Filing Jointly $24,400   (+ $1300 for each spouse 65 or older)

Head of Household $18,350  (+ $1650 for 65 or older)

[Carl]

There's two very simple requirements:

1) You must be legally obligated to pay it.

2) You must actually pay it.

So any of the person's who meet the above two requirements can claim it.

Typically, only the primary borrower will be shown on the 1098 Mortgage Interest Statement. But that doesn't mean the others who cosigned the loan and actually made the payments can't claim it. They can. For example, if your son made some of the payments and you made some of the payments, each of you can claim that part of your payments that was for the interest. But typically, it's only one of those legally obligated to pay the mortgage, that actually paid it and can prove it with bank statements and the such if they are ever audited on it.