Mortgage Interest Loan Maximum for Married Filing Seperately

[Loudspeaker1999]

We're taking out a $400,000 mortgage loan this year, so I understand that we can deduct interest on up to $750,000 if filing jointly but only $375,000 if filing separately.  But can deduct interest up to $375,000 for each of us.  For example, if filing separately, can we each deduct interest on $200,000 for the $400,000 loan?

[Mike9241]

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

Subject to the above, both you and your spouse can each deduct the interest you pay on up to $375,000 of a mortgage loan.

You may also claim the deduction if you appear as an owner on the deed to the home, even if you don't appear on the mortgage. The rules change slightly in community property states. There are nine community property states, including California. In these states, a home purchased during your marriage is usually joint property, even if only one spouse appears on the deed.

[Jspowell99]

Thanks for the reply.  So, if we do married filing separately and split the deduction we are each limited to $187,500.00?

[Rick19744 · Accepted solution]

@Jspowell99 

The answer to your last question is "no".

When MFS you are treated as one taxpayer and must split the mortgage interest limitation you are entitled to.

As a result, the limit for each taxpayer is $375,000.