Tax Question, I bought a house with my girl friend(soon to be wife) together.?

Question

We bought the house together, title is under both of our name (single man and single woman). But her credit is much better than mine so the mortgage was sole under her name. We both pay the mortgage together (with our join account). My question is, will I be able to claim the mortgage interest for my tax deduction? how about property tax? It is very important since we both work and our real estate agent told us that we both can claim it. However, I am not sure if we can trust our agent with that information. Please help~ Thanks

So if we get married this year, can we file all the mortgage interest from the begining of the year or from the date we get married? Thanks

Answer 1

Property tax, yes, since you're on the deed.

Mortgage interest, no, since you're not legally obligated for the loan. (Your agent is wrong and should stick to what he knows, which isn't taxes.)

Once you get married, file a joint return and you can deduct everything. So, if you get married this year you're considered married for the entire year and can take the full deduction on your joint return.

BTW, if you were both on the loan as singles you could split the deduction even though the 1098 would only have one name and SSN on it. You'd each attach a statement to your paper returns referencing the other's name and SSN for purposes of the interest deduction. This is pretty common these days.

Answer 2

You are correct in doubting your agent. You will have to file separately, of course, since you are not married. IRS rules state that YOU may not use the interest deduction because you are not responsible to pay for it, even though you ARE paying for it. Your GF can only claim the half SHE paid, since you paid the other half. She cannot claim an expense which she did not pay. Since you have a joint checking account, you will need to further check with the IRS to see if this arrangement makes things 'legal' for these deductions.

As far as the property tax goes, you can each deduct your half, since both of you are obligated, as joint tenants in ownership, to pay these taxes.

Answer 3

The 1099-INT form that will be issued from the lender will be under HER name. You can try to claim the deduction on your taxes, but if you get audited you'll be in a heap of trouble. Also, that 1099-INT deduction can only be claimed on one tax return anyway, so you'll have to pick on whose it goes.

I'd stick with letting her claim it to avoid anything bad happening.

Now... depending upon how long you've been together, you may qualify for a common-law marriage in your state and can then file jointly. But you'll have to check with your own state's laws about that.

Update... Yes, if you get married tomorrow, you'll be able to file jointly and claim it all together.