Married Filing Separately - Mortgage Interest deduction issue - 100% of deduction?

[jamassey6]

I have a primary house that I paid 100% of the mortgage costs for all of 2023 from my own checking account (loan from November 2021) and I got married in August of 2023.  Both my wife and I are filing Married Filing Separately (MFS) for a few reasons that benefit my new wife (both of us are itemizing our deductions however, she is not taking ANY my mortgage deduction).  When reading the IRS guidelines and using TurboTax Deluxe, the program limits my deduction automatically to $375K of the loan as is the requirements of the IRS due to filing MFS.  However, I noticed in TurboTax that I can override that suggested mortgage interest calculation and change it to 100% of my interest paid on my $640K home loan.  Furthermore, I noticed on H&R Block's Website the following:  

Client question:  "When claiming married filing separately; mortgage interest is deducted by one person or both people?"

H&R Block response:  "When claiming married filing separately, mortgage interest would be claimed by the person who made the payment. Therefore, if one of you paid alone from your own account, that person can claim all of the mortgage interest and property taxes.

In most cases, if you paid the expenses with a joint account you must divide the expenses evenly. If you both were liable for and paid interest on your mortgage that was on a Form 1098, attach an explanation to your return. Include:

• How much of the interest each of you paid
• The name and address of the person who received the form

Deduct your share of the interest on Schedule A."

MY QUESTION: With the above being said, I am trying to find out since I paid the mortgage account 100% and out of my own checking account, and even though we are filing MFS, am I am able to claim 100% of the mortgage interest, taxes, etc. deduction? In other words, since she is not taking 50% of the deduction (she is taking ZERO), I wouldn't be bound to the IRS limit of $375K for MFS filers and could indeed deduct the full mortgage related amounts since it is under $750K, correct? Thank you in advance.

[Cynthiad66]

Yes, you are bound to the $375,00 mortgage interest limit for Married Filing Separately (MFS).  

In general, you can deduct the mortgage interest you paid during the tax year on the first $750,000 of your mortgage debt for your primary or second home. If you are married and filing separately, the limit drops to $375,000.   It does not matter that your wife did not claim the deduction on her return.  

IRS states that "mortgages for you (or your spouse if married filing a joint return) took out after December 15, 2017, to buy, build, or substantially improve your home (called home acquisition debt), but only if throughout 2023 these mortgages plus any grandfathered debt totaled $750,000 or less ($375,000 or less if married filing separately)."

The total amount of deductible state and local income taxes, including property taxes, is limited to $10,000 per year.

 IRS clearly explains the Home Mortgage Interest Deduction.

[Edited 2/6/2024 | 8:45am PST]