Shared home but only one person claims?

[Teacheraskingaquestion]

Hello,

 My fiancé and I are figuring out taxes. We each own the house and it’s split between us.  All expenses and mortgage payments come out of the same account which is shared.

She makes more than I do. (Almost double) Is it possible for her to claim the entirety of the mortgage interest and taxes, while I just do the standard deduction? Or do we each have to claim a portion of it? 

IF we each have to claim a portion, can it be where she claims a larger portion of it due to our salary differences so we can see a larger deduction for her? 

We are not married so it seems we might be able to have her have the deduction but I’m not sure. 

Thank you. 

[DoninGA]

You can split the expenses any way that you want as long as the total amount is not exceeded between the two tax returns.

Since you are not married one of you can use itemized deductions and the other use the Standard Deduction, whichever is more beneficial.

NOTE -

The total of all your itemized deductions on Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older

[Hal_Al]

Q.  Is it possible for her to claim the entirety of the mortgage interest and taxes, while I just do the standard deduction? 

A. Yes. You are allowed to do that and, as you appear to know, that is the best strategy.

Unmarried couples claiming mortgage interest.

You pretty much have a choice. One can claim it all or you can split it. It's usually best if only one claims it, allowing the other to use the standard deduction.

You have to meet the rules, which are:

1. You are legally obligated to pay it
2. You actually pay it. Paying from a joint account where you made sufficient deposits to cover the payments will usually meet this standard. However, paying from your own account would be a stronger audit defense. 

[Teacheraskingaquestion]

Thank you for your answer. So our best idea is to have her file herself and claim the entirety of the house (which the mortgage interest and taxes) are greater than the standard deduction and I just take the standard deduction? 

Will it trigger an audit if we do this, and I put down that I own the house but don’t pay anything?

[Hal_Al]

Q. So our best idea is to have her file herself and claim the entirety of the house (which the mortgage interest and taxes) are greater than the standard deduction and I just take the standard deduction? 

A. Yes.

Q. Will it trigger an audit if we do this?

A.  Probably not, particularly if the 1098 is in her name and SS#.

Q. But, what if  I put down that I own the house but don’t pay anything?

A. Although you enter that info, in TT, it is not sent to the IRS, since you don't claim anything.  Since, you're not claiming anything on the house, don't enter anything. 

[Teacheraskingaquestion]

Thank you!

Last question - Does it change anything if both of our names are on the 1098? I presume not based on the response but I wanted to just double check. 

[Hal_Al]

Q. Does it change anything if both of our names are on the 1098?

A. No. That's actually helpful to have 2 names on the 1098-T.