I paid the mortgage 50-50 with my partner and both of our names are on the title & 1098. We want to claim the tax deduction 50-50.
However our outstanding mortgage exceeds the 750k limit. If we simply split the amount of interest paid and put them into the software, we will over claim the interest deduction. How should we make it correct in the software?
assuming you are not eligible to file a joint return each gets the $750K limit. then since you are splitting the interest you should also be splitting the principal balance.
Thanks for the reply!
> each gets the $750k limit
IRS says we share the $750k limit? https://www.irs.gov/publications/p936#:~:text=You%20can%20deduct%20home%20mortgage,married%20filing%20separately)%20of%20indebtedness.
basically i fail to figure out how to put split balance/interest in turbo tax. Or is it possible to update schedule A manually in turbo tax?
Each of you should deduct the amount of mortgage interest that you actually paid. In preparing your tax return, you would indicate that the amount of interest you are reporting is not what was sent on your 1098.
You do not need to attach a written explanation for the difference. You should have documentation to support your deduction and keep it with your tax records.
Your partner would indicate that they did not receive a 1098 and enter their share of the mortgage interest.
Per IRS Guidance:
If each taxpayer paid one-half of the mortgage and real estate tax expenses, then each Schedule A should reflect one-half as deductions.
Both of you should attach a statement to your Schedules A explaining how you're dividing the mortgage interest and payments of real estate taxes.
Your housemate, who didn't receive the Form 1098, must list the mortgage interest he or she paid on Schedule A line 8b, "Home mortgage interest not reported to you on Form 1098."
Please keep your records on your split of the deductions for the mandatory review period (statute of limitations) since the information reported won't match the records submitted to the IRS.