If you and your spouse file separate returns and one of you itemizes deductions, the other spouse must also itemize, because in this case, the standard deduction amount is zero for the non-itemizing spouse.
- You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse.
- When paid from separate funds, expenses are deductible only by the spouse who pays them.
- For example, if otherwise deductible medical expenses are paid from an account owned by one of the spouses or in a community property state from an account that's the separate property of one of the spouses under the laws of that state, only that spouse may claim a deduction for the expenditure.
- When expenses are paid from funds owned by both spouses, such as from a joint checking account or accounts considered community property under the laws of the state in which the spouses reside, you should generally split the deduction between you and your spouse.
- For example, if amounts are paid from a joint checking account for interest on a residence both you and your spouse own, you would each deduct half of the mortgage interest paid on your separate returns.
- However, if only one of you is eligible for a deduction for an expense (for example, real estate taxes on a property owned only by the eligible spouse), only the spouse who is eligible for the deduction is allowed to claim it, even if the expense is paid from joint funds. Each spouse must maintain records documenting who is considered to have paid the expense.
My housemate and I, both the legal owners of our house, pay mortgage expenses from our joint account. The monthly expense also covers the real estate taxes on our home. The Form 1098 and property tax statement only have my name and social security number. How do we split these payments of interest and taxes on Schedule A so we can both claim our share on our separate tax returns?
To deduct taxes or interest on Schedule A (Form 1040 or 1040-SR), Itemized Deductions, you generally must be legally obligated to pay the expense and must have paid the expense during the year. Even though two unmarried individuals can both be the legal owners of the home and pay the mortgage equally or from common funds, the lender normally sends out only one Form 1098, Mortgage Interest Statement. Additionally, the local taxing authority may also only provide a receipt in one taxpayer's name.
If you’re each eligible to deduct the expense, you can both take a deduction for your portion of the expenses. Determine the proportionate share of the deductions based upon all facts and circumstances.
With respect to mortgage interest, apply the home acquisition debt limit and the home equity debt limit to the qualified residence or residences to determine if all of the mortgage interest can be deducted. If you're unmarried and pay mortgage interest on the qualified residence, the limit on home acquisition debt and home equity debt is applied per taxpayer. See Publication 936, Home Mortgage Interest Deduction for the debt limit amounts.
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.