Mortgage interest for Married Filing Separately and those not married

The mortgage interest tax deduction allows homeowners to reduce their taxable income by the amount of interest paid on certain home loans. Purchasing your home with your spouse or another person can make paying for your home easier, but if you’re not married or use the status of Married Filing Separately, mortgage interest can get a little more complicated for your taxes. We’ll cover those two situations and how it could affect your ability to claim the mortgage interest deduction.

How does the mortgage interest deduction work?

Generally, you can deduct interest on the first $750,000 of mortgage interest debt if Married Filing Jointly, Single, or Qualifying Widower and $375,000 if Married Filing Separately.

To qualify for the deduction, the loan must be secured by your primary or second residence and used to buy, build, or improve the same residence it was secured by.

If your mortgage balance exceeds the applicable limit, you can only deduct interest on the portion up to the limit. IRS Publication 936 includes a worksheet to help calculate your deductible interest.

For couples Married Filing Separately mortgage interest deduction

Let’s first cover couples who are married, but file separately. If this is your case, you’re probably wondering, “Is the mortgage interest tax deduction claimed by one person or both?”

With this tax status, mortgage interest is claimed by the person who makes the mortgage payment. Therefore, if one of you paid alone from your own account, that person can claim all of the mortgage interest (and even property taxes) if they take the itemized vs. standard deduction.

Can you split mortgage interest on taxes if you file separately?

If both spouses paid mortgage interest, you can both claim the deduction. If you and your spouse paid mortgage interest from a joint checking account where you have an equal interest, then each person can deduct 50% of the interest expense. Can one person claim all mortgage interest if a joint purchase occurred? If you jointly purchased the home but one partner paid for the mortgage interest, they can deduct the interest. The split interest should go on Schedule A, if you itemize your taxes.

How do you claim the Married Filing Separately mortgage deduction?

To claim your mortgage interest deduction, you will need to complete Form 1040, Schedule A. This form is used to report your itemized deductions.

For MFS filers who both paid mortgage interest: If you paid mortgage expenses with a joint account, divide the expenses evenly. Attach an explanation to your return and include:

• How much of the interest each of you paid
• The name and address of the person who received the form

Then, deduct your share of the interest on Schedule A.

Reminder: if one spouse itemizes deductions the other spouse must also itemize deductions.

For unmarried persons: Who should claim the house on taxes if not married?

While there isn’t a specific mortgage interest deduction unmarried couples can take, the general rule of thumb is the person paying the mortgage expense gets to take the mortgage interest deduction.

To claim the deduction, you must have legal ownership of the property and a responsibility to pay the mortgage. Generally, this means that you and your partner are listed on the mortgage and responsible for paying the lending institution. This can be confusing if only one of you, typically the first person listed on the mortgage, receives Form 1098.

Can two people claim mortgage interest?

Yes, you can split if you and your partner split the home mortgage interest payments, each partner can claim the interest paid. Follow the additional steps listed below. The split interest should go on Schedule A, if you itemize your taxes.

How do you claim the deduction if you’re not married but sharing a mortgage?

To claim your mortgage interest deduction, you will need to complete Form 1040, Schedule A. This form is used to itemize deductions.

Details for couples who both paid mortgage interest: First, figure out how much mortgage interest you can deduct. Both you and your partner should keep records of when you got the mortgage and how you divided the mortgage interest and property taxes. You should keep the records for at least three years after filing your tax return.

After recording the mortgage interest paid and completing Schedule A, you should also attach a written statement detailing how much interest each spouse paid. The letter should include the name and address of the person who received the 1098.

Get help claiming the mortgage interest deduction

It pays to take the mortgage interest deduction, but it requires a little extra effort to claim if you split mortgage interest on taxes.

Whether you make an appointment with one of our knowledgeable tax pros or choose one of our online tax filing products, you can rest assured that we’ll get you the biggest refund possible.