Splitting deductions - Non-married couple

[peakatchu]

Hi, I've been with my partner for a while and we recently purchased a house together as well as solar panels. We are not married, so we file our taxes separately. I am trying to understand how certain income and deductions/credits should be applied on each of our returns. Should we each take half of the mortgage interest deduction, property tax and solar credit? Or does only 1 person take each of those deductions? Can we do a 25% | 75 % split on the deduction (where I take 25% of the mortgage interest|property tax and she take the other 75%)?

[MonikaK1 · Accepted solution]

 If you own the home together--both names on the mortgage and deed, then you can choose to split the amount you each enter on your tax returns for it if you each paid mortgage payments and property taxes, etc. Generally, the person paying the expense gets to take the deduction. In your situation, each of you can only claim the interest that you actually paid.

See this IRS FAQ for more information.

Unless you have enough itemized deductions to exceed your standard deduction, the interest and taxes entries will not have any effect on your tax liability.

You can also allocate the expenses paid for the energy credit for qualifying solar equipment. Enter these items under Deductions & Credits in the Home Energy Credits section:

Select Yes to the question about making energy-saving improvements

Click Continue

Answer the questions about your living arrangement and home

Continue until you get to the screen that provides entry fields for solar electric costs, solar water heating costs, and geothermal heat pumps if these are what you purchased.

Please see this FAQ list from the IRS which lists the types of energy-saving improvements that qualify for a credit for 2022 and this TurboTax article.

[Steve M314]

I understand that an unmarried couple that owns a home together can each enter the actual mortgage interest paid in Turbo Tax instead of what is shown on the 1098.  Can you also enter just the portion of the property tax paid instead of what is listed on the 1098? For example if the 1098 says $1000 in property tax paid, if the couple is splitting it, can they each enter $500?

[HopeS]

Yes, if you both own the home together you can also split the property tax.

Real estate taxes (also called property taxes) for your main home, vacation home, or land are an allowable deduction if they're based on the assessed value of the property and the property is for your own personal use.

However, you won't be able to deduct your property taxes if you're taking the Standard Deduction.

Even if you itemize, the State and Local Tax (SALT) deduction, which includes property tax, is capped at $10,000 ($5,000 for couples filing separately). This means taxpayers who live or own property in states with high property taxes may not be getting as big of a deduction.

To enter your personal property tax in TurboTax Online, do this:

1. Open your return, if you're not already in it.
2. Select Tax Tools, then Tools, to open the Tool Center.
3. Select Topic Search.
4. Search for personal property taxes (use this exact phrase) and then select Go.
5. Answer Yes to Did you pay personal property taxes in 2022?

See the link below for more information

Real Estate Taxes

@Steve M314