Whether you and your spouse are filing separate tax returns by choice, or you share your mortgage with someone besides your spouse and you're not able to file a joint return, you can still share the mortgage interest deduction. While sharing the deduction is okay, the Internal Revenue Service won't let the total deduction exceed the total interest paid. For example, if $8,000 in interest was paid on the mortgage, the sum of the co-owners' deductions can't exceed $8,000. Therefore, you must decide who gets to claim how much. The specific instructions depend on whether the Form 1098 has your name on it or your co-owner's name.
Divide the interest between the co-owners. For example, if you each paid half the mortgage and the total mortgage interest for the year is $8,000, you could each claim $4,000 on your taxes.
Report your portion of the interest on Schedule A, the list of itemized deductions. If you received the Form 1098, your share of the interest goes on line 10 of Form 1040. However, if your co-owner received the 1098, it goes on line 11 of Form 1040.
Attach a statement showing the name and address of the co-owner who received the Form 1098, as well as how much each co-owner paid, to your tax return if you didn't receive the Form 1098.
Items you will need
- IRS Form 1098
- IRS Schedule A
- IRS Form 1040
- You must itemize to claim the mortgage interest deduction. For married filing jointly returns, if one spouse itemizes, the other must itemize as well. However, if you're single, you can itemize even if your co-borrower doesn't.
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