Tax Year Prior to 2020: Married filing separately mortgage interest

[adonahoe]

does turbo tax know to split it 50/50 or do i enter half of the amount on each return from box 1 on the 1098?

[MinhT]

If you are married and file separately, enter on each return the share of mortgage interest for each spouse. The sum of the two must equal to the amount on form 1098. The split does not need to be 50/50.

But remember that both spouses must have the same deduction option. If one spouse uses itemized deductions, the other spouse must also use itemized deductions, even if they total less than the standard deduction. Or both spouses can use the standard deduction.

[adonahoe]

so we want to split 50/50, do i enter half of box 1 on 1098 or does turbo tax automatically assume 50%?

[MinhT]

You have to enter 50% of the amount on form 1098 on each return. TurboTax does NOT do it automatically.

[Jude38]

If it doesn't have to be 50/50 can it be 90/10? or is there a schedule for that?

[xmasbaby0]

@Jude38 

If you are filing married filing separately you can divide up the mortgage interest between the two of you in whatever way you both agree upon.  It just cannot add up to more than 100% between the two spouses.  Why are you filing separate returns--usually the worst way to file.

If you were legally married at the end of 2018 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 $24,000 (+$1300 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.

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...

[Jude38]

Thank you Xmasbaby,

I very much appreciated your reply - I'm filing this way b/c I am not divorced yet and he no longer resides at the home- A lot of the credits listed I don't use - just medical and house & taxes - some home office -

But that's good about the mortgage Interest I thought it had to be in half 

Thanks Again, jude38

[mbradham1]

How does it work in the case of the property tax deduction? Should it be split between the spouses as well?

[AlanT222]

Yes, if you co-own the property with others, you may split the deduction by the amount each person paid.  

[Mae250]

Hello,

What if you are not married and filing seperately and both names are on the 1098 but only one of your social security numbers is listed on the form? We share bank accounts so everything comes out of there.

[MaryK4]

If you need to split the mortgage interest paid amount, whoever does not have their social security number can indicate this in TurboTax (look for the I did not receive a 1098).  You will each be able to report the amount you can deduct.

[ndj9]

Is the mortgage interest deduction affected by anything like AGI? My husband and I are doing our taxes side by side with identical 50/50 numbers and his summary page is showing half the amount of deduction than mine is. We've restarted 3 times with the same results. Only difference is his slightly higher income and/or AGI.

[ReginaM]

There is no AGI limitation on your mortgage interest.

You can deduct mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017. 

You may want to verify that your return is allowing you to claim your itemized deductions and is not defaulting to the standard deduction.  To check this while in TurboTax, follow these steps:

1. Select Search on the right hand of your screen,
2. Enter Itemized Deductions,
3. Select Jump to Itemized Deductions,
4. Select Wrap up tax breaks at the bottom of the screen,
5. Continue through all through the screens until you get to the Standard Deduction screen:
6. Select, show me a break down of my itemized deductions to review,
7. After you are done, select, Change my deduction,
8. The next screen will ask you Which Deduction you want to take this year,
9. Select Itemized, Select Continue.

[Jbs8917]

Wait. Why are the other tax experts saying you can allocate whatever percentage of mortgage interest you would like between each spouse, as long as the amount equals 100% of the interest paid that year?

My wife has a much larger tax obligation due to being under taxed on a one time company stock option distribution. We wanted to circumvent that liability with leveraging 100% of our property taxes and mortgage interest. Is that not an option?

[xmasbaby0]

@Jbs8917 Remember that if one of you itemizes the other must also itemize when you file MFS.  If one spouse uses all the  deductions, it leaves the other spouse with nothing to deduct--no itemized deduction and no standard deduction either.

If you were legally married at the end of 2019 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 $24,400 (+$1300 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.

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...