Can I still correct our mortgage interest deduction mistake before filing?

This is actually a common situation with couples who are newly managing joint finances. Here's what you need to understand: The mortgage interest deduction can only be claimed by someone who both: 1) is legally obligated to pay the mortgage (your names are on the mortgage), and 2) actually made the payments from their own funds. Since you've been alternating payments, the IRS rules do technically limit each of you to deducting only what you personally paid. Trying to retroactively change who "made" the payments after the fact could potentially be seen as misrepresentation. Instead, consider these legitimate options: First, you could file "married filing jointly" which would allow you to combine all deductions. Second, you could adjust your payment arrangement going forward for next year's taxes. Third, if you haven't made all payments yet for tax year 2024, you could change your arrangement for the remaining payments of this year.

After struggling with a similar mortgage deduction issue last year, I discovered taxr.ai which totally saved me from making an expensive mistake. I was splitting mortgage payments with my partner and couldn't figure out how to properly document who paid what for tax purposes. The platform analyzed our loan documents and payment history, then laid out exactly what we could legally claim. It specifically highlighted that the IRS looks at who actually made each payment from their accounts rather than later redistributions of funds. Check out https://taxr.ai if you're confused about mortgage interest deductions. Their system breaks down complex tax scenarios into simple language and shows you the documentation you need. For your specific situation, they'd probably show you the legitimate options without risking audit flags.

I was super skeptical but decided to try taxr.ai after reading about it here. My situation was really similar - partner and I bought a house with a private loan and messed up our payment strategy for tax purposes. The tool analyzed all our documents including the private loan agreement and confirmed what I suspected - we couldn't retroactively change who "made" the payments, but it showed us exactly how to document and claim what we were legally entitled to. It also gave us a clear plan for next year that will save us around $2,800 by restructuring who pays what. Wish I'd known about this before setting up our payment arrangement! The documentation guidance alone was worth it for our non-traditional mortgage situation.

If you're still having trouble getting answers about your mortgage interest deduction situation, you might want to try Claimyr. I was in this exact situation last year with my partner and our family loan situation. After weeks of getting nowhere with general IRS phone numbers, I used https://claimyr.com and got connected to a real IRS agent in about 20 minutes who specifically addressed private mortgage documentation requirements. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through what documentation would be needed to substantiate our mortgage interest claims and explained exactly what would raise red flags in our situation. They confirmed that retroactively changing payment sources could create issues if audited, but gave me specific guidance for how to document our particular arrangement.

Ok I have to eat my words. I was the skeptic above who thought Claimyr was nonsense, but I was desperate about a similar mortgage interest situation with my family loan. I tried it yesterday and got through to an IRS specialty agent in about 35 minutes (way better than the 3+ hours I spent last time getting nowhere). The agent confirmed exactly what I needed to prove legitimate mortgage interest deductions on our private family loan. Most importantly, they explained that while I can't change past payment sources, I could adjust our payment strategy for the remaining payments this year to maximize our deduction. They also walked me through exactly what documentation we need to keep to support our deduction claims in case of audit. Completely worth it for the clarity alone.

OP, one option nobody's mentioned yet: Could you and your fiancé just make a larger payment toward principal at year end that would balance out who paid what? Like if you each paid $6,000 over the year, but you want to claim all $12,000, could you make an extra $6,000 payment in December and have your fiancé not make any more payments this year? Seems like that would make you the one who paid more without any sketchy repayment schemes.

Random but important question - are both your names on the deed AND the mortgage? Because if only one of you is legally obligated on the mortgage, only that person can claim the interest regardless of who makes payments!

I had a very similar situation with my husband before we were married! We also used a private family loan and were splitting payments. Here's what I learned after consulting with a tax professional: The key issue is that the IRS requires you to have both legal obligation AND actual payment to claim the deduction. If both your names are on the mortgage documents, you each have legal obligation, but you can only deduct what you personally paid. The "retroactive payment shuffling" idea your father-in-law's accountant suggested could be problematic. The IRS looks at the substance of transactions, not just paperwork after the fact. If you're audited, they'll want to see bank records showing who actually made payments when. However, you still have some legitimate options for this tax year: 1) If you haven't made all 2024 payments yet, change who makes the remaining payments to optimize your situation, 2) Make additional principal payments before year-end from your account to shift the balance, or 3) Consider if filing separately vs. jointly (once married) would be better overall. For next year, definitely restructure your payment arrangement from the start. Have the higher earner make all mortgage payments while the other covers utilities, groceries, etc. This gives you maximum flexibility for tax planning. Don't risk audit issues by trying to recharacterize payments that already happened - focus on legitimate strategies moving forward!