Boyfriend and I bought a house together, how do we split up mortgage interest and taxes when we directory taxes?
Answers:
Each of you can subtract the amount you actually paid. If you split the payments 50-50, later you'd each deduct partly of the total interest, and real estate taxes if they are paid through the mortgage compensation. This assumes that you are both on the mortgage and on the title.
You should be paying the interest and taxes in equal % that you own the property...in order to itemize, you must both owe the debt and hold paid it.
So, if you own 50% and paid 75%, you would be restricted to a 50% deduction (and no one would win the other 25%).
Note, you need to read the schedule A instructions to ensure that the creature who's SSN isn't on the 1098 gets proper credit for the interest paid.
Get married. Then the grill answers itself!
Have someone do your taxes professionally the first time, from there you have the guild and can do it yourself. Safest opening to cover all your bases.
The best thing to do is to have the being with the higher income money the mortgage and real estate taxes, then take off the entire amount on their tax return. The other person can steal the standard deduction.
For example,
Interest = $7,000
RE Tax = $3,000
If you go halfsies, you respectively get $5,000. If your other Schedule A items (state income taxes paid, charity, etc) are $2,000 respectively, then you'll each catch to write off $7,000 on Schedule A ($5,000 + $2,000).
If one person pays mortgage and RE excise, they will write off $10,000+$2,000 or $12,000. The other person will clutch the standard deduction of $5,450 since their Schedule A is only $2,000. Combined, they will write sour $17,450...whereas with halfsies, the combined write-off is only $14,000.
Yes, it is permitted as long as the person claiming the entire amount pays the entire amount. Percentage of home ownership is irrelevant. To compensate, the non-paying person can settle all the utilities, food, and other non-deductible items.
If you do take my direction, make sure the paying person also make all of the charitable donations. Any charitable donations by the person taking the standard conjecture is wasted.
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