me and my girlfriend bought a house together on January 8th 2021 and both of our names are on the deed as well as the mortgage. We are not married yet and we are going to file our taxes separately as single. We paid over $12000 in mortgage interest in 2021 and I wish to itemize and claim all the mortgage interest on my return and meanwhile she still uses the standard deduction. I am wondering if this is do-able and is there anything extra we have to prepare for or do? Thanks.
If you paid the mortgage then you can claim it on your tax return.
Your girlfriend can use the standard deduction on hers.
I don't think the IRS would agree with your approach, unless you actually paid for all the interest and property taxes and your housemate paid none.
Each of you are only entitled to deduct payments you each made. You can not deduct payments she made and she can not deduct payments you made.
I want to understand how to define who pays for the mortgage? In our situation, the bank account that I used to pay the monthly mortgage is also co-owned by two of us.
Using a joint account does muddy the water a bit. If you jointly own the bank account, you jointly own the money in the bank account. If she does not work and put money in the bank and you do, then you would be able to say that you are paying the entire bill.
If you both make the same and deposit the same, then you would technically need to claim that you split the interest since you are both equally depositing into the account. The best way to decide how much is to compare incomes and allocate the percentage of mortgage interest based on income deposited into the account.
Hi there and thanks for your reply, the bank account used to be owned only by me, I added her name on it before our mortgage begins(a silly decision though looking at it as of right now). and unfortunately we both deposit our incomes into some other accounts
The basic thing here is what's referred to as "tracing rules". If audited, you may have to prove who paid what and show a money flow path of the person claiming the deduction. With a personal joint account, all money in the account is generally 50/50 regardless of where the money comes from. It complicates things when the joint account holders are not married to each other. But if you can show that say for example, 70% of the money that flowed into the account during the year was from you, and 30% from the other party, then claiming 70% is no problem.
Overall, I can't see the IRS auditing on this specific item. But if audited on something else (or pulled for a random audit) other things could come to light.
Basically, each of you should only claim what you can support and prove you actually paid.
So the account that is used to pay the mortgage is mostly your income? If it is, then you can easily say that you are paying the mortgage payments. Otherwise, you would have to do some calculations to determine how much is yours and how much is hers. If it is a joint bill account and you are equally depositing money, you would need to split it 50/50.
I am wondering how and where do I tell IRS that the account that is used to pay the mortgage is my account?
You don't really, unless you are audited. So, just keep records of the deposits and mortgage payments with your tax records. There is no place on your return that you will be asked to supply this information.
@tan_zhif wrote:
I am wondering how and where do I tell IRS that the account that is used to pay the mortgage is my account?
There is no place on a return (or statement) to tell the IRS about the account.
Each party to a joint account has full control over the funds and, in fact, can withdraw all of the funds and use as much of those funds for any purpose. This is the nature of a joint account.
Is this still the case if I make the payment from my personal bank account but the Significant other reimburses half?
@bareid You are adding to a thread that has had no activity for nearly three years. What are you trying to do? Is your own issue in regard to co-owning a home with someone? Provide some details.
Yes - i saw that but was hoping for some traction. My SO and I bought a home in 2024, getting married in 2025. Both of us are on the mortgage, but instead of paying out of a joint account our mortgage/tax/interest is all paid from my personal account and then she turns around and send me money for 1/2 of the mortgage. So the question is, since it's all being paid out of my account initially can I deduct the interest and taxes or do we have to split 50/50
@bareid When you enter the homeowner deductions you are not entering anything about what bank account was used to make those payments. You should keep accurate records for yourselves just in case of an audit someday, of course. If you each paid half, AND you are both on the mortgage and/or deed, then you have the option of each entering your half on your return as itemized deductions. Or it might be more advantageous for only one of you to use the whole amount.
Itemized deductions have no effect unless you have enough of to exceed your standard deduction. If you do not have enough itemized deductions, then it just defaults to your 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.
2024 STANDARD DEDUCTION AMOUNTS
SINGLE $14,600 (65 or older/legally blind + $1950)
MARRIED FILING SEPARATELY $14,600 (65 or older/legally blind + $1550)
MARRIED FILING JOINTLY $29,200 (65 or older/legally blind + $1550)
HEAD OF HOUSEHOLD $21,900 (65 or older/legally blind + $1950)
More information on home ownership:
CO-OWNING A HOME
Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, and loan origination fees (“points”) that you paid in 2024You should have a 1098 from your mortgage lender that shows this information.Lenders send these in January/early February or you may be able to import the 1098 from the lender’s website.
There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.
Buying a home is not a guarantee of a big refund. Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home
ownership deductions.
Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees. There are no deductions for appraisal, inspections, title searches, settlement fees. etc.
Your down payment is not deductible.
Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.
Home improvements, repairs, maintenance, etc. for your own home are not deductible. (With possible exceptions for certain energy credits) (BUT——do make sure you keep careful written records/invoices, etc. of any improvements you make to the home for someday when you sell it.)
Homeowners Association (HOA) fees for your own home are not deductible.