Mortgage interest when married filing separately

[bschuey]

Just so I understand, if married filing separately and both of us co-own the mortgage and lease, then both of us half to divide the percentage mortgage interest number on the 1098 in half?

Just to be clear, if I am the spouse that received the 1098 and my social is the only one listed on the 1098, despite both of us being on the load, then are we both supposed to split the percentage mortgage interest in half, then enter?

FYI-I already entered the full amount of the percentage mortgage interest because it is my SS# listed on the 1098. Now what? Does my husband not enter the 1098 or enter "0" for percentage mortgage interest?

Also, what about the taxes. We already are losing in NYS because of the tax cap. Do we get to enter the full tax amount for married filing separately OR are we supposed to divide that in half each too?

[xmasbaby0]

When you file MFS, you both must itemize or both must use standard deduction.   If you itemize, the amount that the two of you enter cannot exceed 100% of the total----so you cannot each use 100% of a deduction.  What you use cannot total more than 100%.  And....your property tax deduction is capped at $5000 when you file MFS--not at $10,000,    You can each use up to $5000 to reach the cap of $10,000 for a married couple.

If you were legally married at the end of 2023 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 $27,700 (+$1500 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 since with online, you get one return per fee.

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...

[DMarkM1]

Yes, you can split the mortgage interest paid even though the form 1098 has only one taxpayer social security number.  As a married couple who co-owns the home loan and are filing separately, you can each just split the 1098 amounts (boxes 1 and 2) in your TurboTax entries for the home loan.  In other words each of your TurboTax entries will include a form 1098 from the lender that includes only your share of the interest and loan amount.  

As xmasbaby0 stated earlier, the state and local tax limitation is $10,000 for a married couple so if you file separately that is split $5000 each.     

[vincerz]

Do you need to evenly split the interest paid? or can one spouse use a larger amount if the loan was for less than the 750k limit. and how would you enter this

[MonikaK1]

If you are in one of the nine community property states, you may need to split it 50/50; consult applicable state law.  If you are not in a community property state, you can allocate it any way you like; simply enter the amount each of you is claiming for the mortgage interest deduction on your separate return under mortgage interest. 

It may be easier for the spouse whose name appears on the Form 1098 to claim the interest deduction, so that the IRS information return matching programs don't flag the returns for audit.

@vincerz