My husband and I are filing married but separate for the 1st time. I am claiming our son as deduction. But do we have to"split" property taxes and mortgage interest?

[MinhT1]

You do not have to split property taxes and mortgage interest.

However, please note that when a married couple files separately, both spouses have to use the same deduction method; Standard deduction for both OR itemized deductions for both.

If one spouse used itemized deductions, the other also has to itemize even if the itemized deductions are less than the standard deduction.

[teripendland]

Hi, That is where I am confused.  I selected "itemize" deductions vs standard and since I am the working parent I am taking our son as the deduction, his tuition, property taxes and mortgage insurance.  What would my husband even need to itemize then?  All he had was one month of Uber that he is filing.  

[bluedeb · Accepted solution]

It depends,  in general, you split them based on who paid for what.  If your incomes were combined, you can split them in any reasonable matter, but the total amount must equal what is on your 1098. 

If one person makes a specific donations then only that person should claim them (ex. her medical expenses, he donated clothes, etc). 

Also,  that if one spouse itemizes, the other spouse must also itemize, so you can't shift all the deductions to one spouse and the other spouse use the standard deduction.

If you and your spouse file separate returns and one of you itemizes deductions, the other spouse must also itemize, because in this case, the standard deduction amount is zero for the non-itemizing spouse.

• You may claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse.
• When paid from separate funds, expenses are deductible only by the spouse who pays them.
• For example, if otherwise deductible medical expenses are paid from an account owned by one of the spouses or in a community property state from an account that's the separate property of one of the spouses under the laws of that state, only that spouse may claim a deduction for the expenditure.
• When expenses are paid from funds owned by both spouses, such as from a joint checking account or accounts considered community property under the laws of the state in which the spouses reside, you should generally split the deduction between you and your spouse.
• For example, if amounts are paid from a joint checking account for interest on a residence both you and your spouse own, you would each deduct half of the mortgage interest paid on your separate returns.
• However, if only one of you is eligible for a deduction for an expense (for example, real estate taxes on a property owned only by the eligible spouse), only the spouse who is eligible for the deduction is allowed to claim it, even if the expense is paid from joint funds. Each spouse must maintain records documenting who is considered to have paid the expense.

[bluedeb · Accepted solution]

@teripendland  the rules of Married Filing Separate states each couple must either both use the Standard Deduction or both use Itemized Deductions.  You can't file as Married Filing Separate if you don't both use the same deduction. 

[teripendland · Accepted solution]

That is helpful, thank you.  The thing is that I am the working spouse and my income pays for everything in our household.  My husband worked one month of PT Uber ridesharing.  He needs to file and pay taxes on the $2K gross earnings, but other than that, he did not donate or pay out of his income our mortgage, taxes, tuition, child expenses, etc.  So, when you say he needs to "itemize" too I just don't know what he's itemize other than just a super straightforward 1040 basically to pay his taxes on the Uber earnings.  Yes, we do have a joint checking so I suppose that would appear that we funded it jointly but our earnings would signify otherwise.  And, if we split the property and mortgage interest then I guess I could see how that impacts my return and how much I have to pay.  

[teripendland]

I should also mention we are not in a community property state.

[VolvoGirl · Accepted solution]

May I ask why you want to file separately?  You can report his Uber self employment income on a Joint return.  Joint is really the best way to file.

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction. And if you are in a Community Property state MFS gets tricky to figure out. Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns. And if you are using the Online version that means using 2 accounts and paying the fees twice.

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong. If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!

And there are several credits you can't take when filing separately, like the
EITC Earned Income Tax Credit
Child Care Credit
Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….
https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[VolvoGirl · Accepted solution]

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger.

There is no min amount or standard amount for schedule C business expenses. You get to take both your Standard Deduction or itemized deductions on Schedule A and all your business expenses on Schedule C.

Do you think you have enough deductions to itemize?  Some deductions are limited.

For 2019 the standard deduction amounts are:

Single 12,200 + 1,650 for 65 and over or blind

HOH 18,350 + 1,650for 65 and over or blind

Joint 24,400+ 1,300 for each 65 and over or blind

Married filing Separate 12,200 + 1,300 for 65 and over or blind

[bluedeb · Accepted solution]

@teripendland  Your husband would have to change the deduction to itemized (whether he has any or not), if you file as itemized.

Have you looked at filing jointly?  

Advantages of filing jointly

There are many advantages to filing a joint tax return with your spouse. The IRS gives joint filers one of the largest standard deductions each year, allowing them to deduct a significant amount of their income immediately.

Couples who file together can usually qualify for multiple tax credits such as the:

• Earned Income Tax Credit
• American Opportunity and Lifetime Learning Education Tax Credits
• Exclusion or credit for adoption expenses
• Child and Dependent Care Tax Credit

Joint filers mostly receive higher income thresholds for certain taxes and deductions—this means they can earn a larger amount of income and potentially qualify for certain tax breaks.

Consequences of filing your tax returns separately

On the other hand, couples who file separately receive few tax considerations. Separate tax returns may give you a higher tax with a higher tax rate. The standard deduction for separate filers is far lower than that offered to joint filers.

• In 2019, married filing separately taxpayers only receive a standard deduction of $12,200 compared to the $24,400 offered to those who filed jointly.
• If you file a separate return from your spouse, you are automatically disqualified from several of the tax deductions and credits mentioned earlier.
• In addition, separate filers are usually limited to a smaller IRA contribution deduction.
• They also cannot take the deduction for student loan interest.
• The capital loss deduction limit is $1,500 each when filing separately, instead of $3,000 on a joint return.

Here are the credits you lose by filing separately.

What Do You Lose By Filing Separately?

• The child and dependent care tax credit.
• The adoption credit.
• The Earned Income Credit.
• Tax-free exclusion of U.S. bond interest.
• Tax-free exclusion of Social Security benefits.
• The credit for the elderly and disabled.
• The deduction for college tuition expenses.

[teripendland]

We want to keep our earnings separate right now because of a loan that my husband has and do not want to have my earnings / pay in jeaopardy or connected.

[bluedeb]

@teripendland  Then the only thing you can do is have him select itemized deductions.