Avoid 3 common mistakes when claiming the mortgage interest deduction.
Mistake #3: Claiming the Wrong Deduction Amount
The third common mistake with the mortgage interest deduction is claiming too much of your share. Here’s a common question from a reader named Walt:
My partner and I co-own a home and each pay 50% of the mortgage. I’ll have enough total deductions to itemize, but she won’t. If she claims the standard deduction on her tax return, can I claim 100% of the interest deduction on my return?
If you own a home with a spouse and file taxes together, you can claim the total amount of mortgage interest on a joint tax return. However, if you’re married and file taxes separately, or you have a mortgage with someone who isn’t your spouse, you can’t pool the deduction.
As I previously mentioned, each borrower can only claim the interest that he or she paid during the year. So Walt can only claim 50% of the mortgage interest.
It’s important to take advantage of every tax break that you can because they legally reduce the amount you have to pay the government. So, if you own a home or a portion of a home, be sure to deduct your allowable mortgage interest. If you have a complicated situation, it’s a good idea to consult with a qualified tax accountant.
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