OK tax question!!

[SC4EVA]

Guys need some help on this one. I have decided to fire my accountant because it turns out he has messed up my friends taxes way to much in the past. I am not sure if I want to go to H&R Block type of place so I am thinking about handling my own. So here is the taxation question. I currently live in and own a condo with a non-married roommate (tenants in common) - While both names are on deed/taxes/etc only one is on the actually mortgage. When filing can we just add up the interest and taxes and divide by two for filing Ex (15k in interest/taxes so 7500K for each as deduction) or do we have to fill a whole separate section? Thanks for any help on this one.

 

[musclemom]

Guys need some help on this one. I have decided to fire my accountant because it turns out he has messed up my friends taxes way to much in the past. I am not sure if I want to go to H&R Block type of place so I am thinking about handling my own. So here is the taxation question. I currently live in and own a condo with a non-married roommate (tenants in common) - While both names are on deed/taxes/etc only one is on the actually mortgage. When filing can we just add up the interest and taxes and divide by two for filing Ex (15k in interest/taxes so 7500K for each as deduction) or do we have to fill a whole separate section? Thanks for any help on this one.

While I have bitched about my tax problems myself on this board I actually have experience with this since we owned our house jointly with my mother.

Only one party can claim the deduction, it doesn't matter who though, but you can't "split" a deduction.

You know you don't get ALL that money back, only a percentage, right?

Finally, the smartest thing to do is see who is going to owe more to the Feds., that person claims the deduction to reduce the amount of money THEY have to pay the Feds., then they pay the other party their fair share of the deduction (as long as you do a computerized tax program it's pretty easy to tack on/delete the interest/taxes to see what the actual number is).

How'd you handle it in previous years???

 

[SC4EVA]

Well last year was the first year we - The accountant handled everything so I will need to check when I get home. I want to say that they split the amount paid in half along with information showing equal payments for deductions.
http://www.irs.gov/publications/p936/ar02.html

 

[musclemom]

Well last year was the first year we - The accountant handled everything so I will need to check when I get home. I want to say that they split the amount paid in half along with information showing equal payments for deductions.
http://www.irs.gov/publications/p936/ar02.html

Okay, on reading it I see why you would go that way:

More than one borrower. If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print “See attached” next to the line.

Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. You should let each of the other borrowers know what his or her share is.
In your original post the scenario you gave was that only one party is liable for the mortgage. If you both aren't on the mortgage (NOT talking about the deed), you both aren't liable for it, even if you both are on the deed, at least that's how it's always been explained to me.

 

[SC4EVA]

Yes thats exactly it - my name is on actual mortgage - Both names on everything else - Not sure what to do =(

 

[SlimJim52]

While I have bitched about my tax problems myself on this board I actually have experience with this since we owned our house jointly with my mother.

Only one party can claim the deduction, it doesn't matter who though, but you can't "split" a deduction.

You know you don't get ALL that money back, only a percentage, right?

Finally, the smartest thing to do is see who is going to owe more to the Feds., that person claims the deduction to reduce the amount of money THEY have to pay the Feds., then they pay the other party their fair share of the deduction (as long as you do a computerized tax program it's pretty easy to tack on/delete the interest/taxes to see what the actual number is).

How'd you handle it in previous years???

there you go. Get the ole Quicken Tax files and run the numbers through for all scenarios. One gets interest while other gets taxes etc. Find which way you get the best tax break from the deductions.

We found that our Fed tax was the same no matter how we did ours. BUT, our state has a property tax break. If we are joint, I get about $125 off due to the house. I get the same amount if I file separate, but she gets the full $275 off from the car. So, we benefit on the state level by filing separate.

 

[SC4EVA]

Yeah think the best idea is one to claim interest one to claim tax - Weird though because I work in a differnet state then I live I think the turbo is doubling my income for certain fields?

 

[sawastea]

You should've received a 1098 from the mortgage company which would have one or the others SS# on it, the government has the person who's SS# is on the 1098 as the person on file that paid the interest and taxes. If this is the case they could choose to handle it several ways, as in they can try to attach a note to both returns explaining the situation with the other taxpayers information on it as well, or they can agree to file the one return and tax share the savings. Musclemom clarified it.