Splitting mortgage interest and property tax deduction in community property state

[spboyle8]

My wife and I are filing married, filing separately for student loan purposes. We live in California.  We only have one property, our primary residence. We only received one 1098 from our lender, with both our names on the mortgage/1098 form.

For deducting mortgage interest and property taxes paid - do we both upload the 1098 form on our separate returns, and then manually split the values for mortgage interest and property taxes paid in half (one half for me and the other for my wife)?

[Vanessa A]

Yes, you would both upload it to your individual returns. With it being an upload from your bank, one of you may have to manually enter the 1098 as the bank may decide it was already uploaded.  When you do upload you may have to edit the amounts on the form. You would divide it based on who paid it, if you are itemizing your expenses.  If only one person was responsible for the mortgage payment then that person would claim the mortgage interest.  If it was paid out of a joint account, then you would split the amount between the two of you, entering half on each of your returns. The person who is listed second will select "My name is not on the 1098, or my name isn't the first one listed".  Remember, if one person itemizes you both must itemize as the other person cannot take the standard deduction. 

Itemized expenses include mortgage interest, gambling losses up to winnings,  charitable contributions, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss.  Your health insurance and all medical expenses are only deductible for the amount that is over 7.5% of your AGI.  This means if your AGI is $50,000, then the amount that is over $3,750 is deductible.  

Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your expenses. 

The 2024 Standard Deductions are as follows:

• Married Filing Joint (MFJ)              $29,200
• Married Filing Separate (MFS)      $14,600
• Head of Household (HOH)             $21,900 
• Single                                                 $14,600                                

Blind or over 65 and MFJ or MFS add $1,550

Single or HOH if blind or over 65 add $1,950

Standard versus Itemized Deduction

[spboyle8]

Thanks.

Would the same principles apply to the property taxes paid on the 1098?  I.e. we can split that in the same fashion as with mortgage interest?

[Vanessa A]

Yes, that is correct.  Any expenses, including taxes or even medical expenses would be split either based on how you actually paid or 50/50 if out of a joint account.