Mortgage interest and married filing separately

[BrettB549]

If my wife and I file married but separately, should we enter the full amount of mortgage interest in the application and the full tax amount, or should we check the box and indicate half of the mortgage interest on the page leaving the note that we're married filing separately?  We currently pay all home costs from a joint account.

If we half the interest on that screen, do we later go by the mortgage cap of 375k or we use the 750k figure to answer the question?

[xmasbaby0]

Why are you filing separate returns?  That is usually the worst way to file.

But if you file MFS you can divide the mortgage interest and property taxes between you --- the total the two of you claim cannot equal more than 100% of what was paid.  Remember that if you file MFS you are filing TWO separate returns--one for each of you.  You do not write little notes to the IRS on your tax return.

If you were legally married at the end of 2019 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $24,400 (+$1300 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[BrettB549]

BrettB549

New Member

27m ago

 

I understand all of that, but none of those credits would apply for us, unfortunately.  We are both filing separate returns and my wife is taxed heavily as she works out of state and has dual incomes (I plan to run the numbers both ways.  If we half that amount (interest) in the application, turbo tax indicates you should give an explanation as to why the amount is different than what is on our 1098.  If we half the interest and tax, but leave the mortgage amount whole, then we would be well over the 375 cap.  The whole mortgage is under the 750 threshold.

Under "Adjusted mortgage interest and points" category is the adjusted amount the same as the original amount for each of us MFS (assuming we have halved the interest and tax amount).

[BrettB549]

I understand all of that, but none of those credits would apply for us, unfortunately.  We are both filing separate returns and my wife is taxed heavily as she works out of state and has dual incomes (I plan to run the numbers both ways.  If we half that amount (interest) in the application, turbo tax indicates you should give an explanation as to why the amount is different than what is on our 1098.  If we half the interest and tax, but leave the mortgage amount whole, then we would be well over the 375 cap.  The whole mortgage is under the 750 threshold.

Under "Adjusted mortgage interest and points" category is the adjusted amount the same as the original amount for each of us MFS (assuming we have halved the interest and tax amount).