I'm a NJ resident and want to file MFS, my wife and I pay bills from our joint checking account. How do we file the property taxes and interest on our primary home? Both our names are on all of the legal property documents.
As long as both of you are on the title and on the mortgage, you can allocate the property tax and mortgage interest in whatever manner you wish,
Both of you, however, will have to elect the same method of claiming deductions - standard deduction or itemized deductions.
That means if one party itemizes to benefit from a higher percentage of mortgage interest and property tax, the other person will also have to itemize. Unless there are other, significant itemizable deductions, that party will lose the benefit of the standard deduction.
"Married, Filing Separately" is generally not the best approach for reducing your combined tax liability.
See Is it better for a married couple to file jointly or separately? for additional information on this subject.
The person on whose tax return property taxes and interest on your primary home must be decided between the two of you. This is not a matter that the IRS will decide when a couple files Married Filing Separately. There are rules when it comes to claiming children as dependents and the like, but not for the division of property and bills that you own together.
Thank you. The follow-up question is more of can both of us split the property tax & interest by whatever percentage we deem, 50/50, 70/30, 60/40 etc when filing and is that “acceptable” by the IRS vs it being a matter that the IRS will decide when a couple files Married Filing Separately. I know you said there are NOT rules for the division of property but I wanted to make sure I stated the question properly and the response was accurate to my question. So with that said, we can file the PITI anyway WE deem fit?
As long as both of you are on the title and on the mortgage, you can allocate the property tax and mortgage interest in whatever manner you wish,
Both of you, however, will have to elect the same method of claiming deductions - standard deduction or itemized deductions.
That means if one party itemizes to benefit from a higher percentage of mortgage interest and property tax, the other person will also have to itemize. Unless there are other, significant itemizable deductions, that party will lose the benefit of the standard deduction.
"Married, Filing Separately" is generally not the best approach for reducing your combined tax liability.
See Is it better for a married couple to file jointly or separately? for additional information on this subject.