- Can You File a Joint Return if You Are Married & Don't Live Together?
- Do You Have to Be Legally Married to Claim Your Boyfriend on Your Taxes?
- What Are the Benefits of Joint Tax Returns?
- Can a Married Couple File Jointly From Different States?
- Can I File Married Separately & Deduct the Mortgage While My Spouse Claims the Standard Deduction?
- When Should a Married Couple File Taxes Separately?
The general rule for tax deductions is that you can't take deduct money you didn't spend yourself. If you and your spouse file a joint return, though, your spouse's write-offs affect your taxable income too. If your spouse pays mortgage interest on your house, on a joint return you still see a benefit. Separate returns are another matter.
At the end of the year, your bank sends out a Form 1098, showing the amount of mortgage interest paid on your house. You get only one form, even if you and your spouse file separate returns and both made mortgage payments. Even if the 1098 is in your spouse's name, she can only claim the interest she actually paid. To get your share of the deduction, you report the portion you paid, just as if you had received a 1098. You then must attach a statement to your return explaining why the IRS doesn't have a 1098 in your name.
In community property states such as California, separate returns require splitting everything down the middle. If, say, you earn $50,000 and your spouse earns $40,000, you each report $45,000 on your tax return. Likewise, you split deductions: if your spouse pays $10,000 in mortgage interest, you can each claim a $5,000 write-off. There are exceptions -- for are cases when the money or the house count as separate property -- but usually you get a cut of any deduction in your spouse's name.
If you and your spouse separate or divorce, he may end up paying the mortgage on the place you live. If it's your house, you can deduct any mortgage interest he pays. Unfortunately, you also have to report the payments as alimony, which is taxable. On a jointly owned house, you can deduct half the interest paid, and report the same amount as alimony. This applies only if the divorce or separation agreement specifically requires he make the mortgage payments as a form of alimony.
Taking the Write-Off
No matter who writes the check to the bank, you can only take the mortgage-interest deduction by itemizing on Schedule A. If you take the standard deduction, there's no write-off for either of you. What's more, if you file separate returns, you and your spouse have to be in sync: both of you take the standard deduction or both of you itemize. How you work it out if you disagree is up to you. One way is to do a rough draft of your tax return calculated both ways to see which works out best.
- Jupiterimages/Comstock/Getty Images