How do we split mortgage interest deduction when filing Married Filing Separately for student loan benefits?
My husband and I are filing our taxes separately this year because we're trying to keep his income-based student loan payments manageable. We're both itemizing our deductions. Originally, we planned to have him claim the mortgage interest deduction since he's the one who physically makes the payment to the bank each month (I transfer my half to his account). However, we just found out that for Married Filing Separately (MFS) status, you can only claim interest on up to $375k of mortgage balance. Our mortgage is around $520k total, which is less than the $750k cap for joint filers but more than the MFS limit. He's the first name on the mortgage and received the 1098 form. We're trying to figure out the best way to handle this situation. I need advice (and hopefully links to IRS publications) on: 1. Can we each claim half of the mortgage interest deduction as MFS filers, with each of us using our individual $375k mortgage balance cap? I know unmarried co-owners can split it, but I'm getting mixed information about whether MFS couples can do this. 2. Since we split the mortgage costs 50/50 but the actual bank payment comes from his account (after I transfer my portion to him), am I still eligible to claim my portion of the mortgage interest?
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Molly Chambers
The MFS mortgage interest deduction can be tricky! You're right that MFS filers have a $375k mortgage limit versus the $750k for joint filers. For your first question: Yes, MFS couples can each claim a portion of the mortgage interest, but you're each still limited to the interest on $375k of acquisition debt. This is covered in IRS Publication 936 (Home Mortgage Interest Deduction). The key is that you're each legally liable for the mortgage - both names are on the loan, right? For your second question: The fact that your husband physically makes the payment doesn't matter for tax purposes. What matters is who's legally obligated on the loan and who's actually paying (even if indirectly). Since you're transferring your half to your husband, you're effectively paying your portion, so you can claim your share of the interest deduction. Just make sure that between the two of you, you don't claim more than the total interest paid as shown on the 1098. You'll both need to include Form 8958 (Allocation of Tax Amounts Between Certain Individuals Who File Separate Returns) with your tax returns to show how you're splitting the mortgage interest.
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Ian Armstrong
•Thanks for the information! What if only one spouse's name is on the mortgage? Can the other spouse still claim their portion of the interest if they contribute to the payments?
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Molly Chambers
•If only one spouse's name is on the mortgage, it gets more complicated. The spouse who isn't on the loan can still claim their portion of the interest if they're making payments and they have ownership interest in the home (like if both names are on the deed). For the payment part, as long as you can document that you're contributing to the mortgage payments (through bank transfers, etc.), that satisfies the requirement that you're actually paying the interest. The key is being able to prove your ownership stake in the property and your contribution to the payments.
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Eli Butler
After struggling with a similar MFS situation last year, I found taxr.ai (https://taxr.ai) incredibly helpful for figuring out our mortgage interest split. I uploaded our mortgage documents and tax forms, and their system analyzed everything and gave us a clear breakdown of how to properly allocate the deduction between us. It even identified a mistake our CPA had made the previous year about how much each of us could claim. The tool answered exactly your question about how MFS couples should handle mortgage interest deductions when both are on the loan but only one receives the 1098. Saved us a ton of research time and gave us peace of mind that we were doing it correctly.
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Marcus Patterson
•Does taxr.ai work for other tax documents too? I've got a complicated situation with rental property depreciation and I'm wondering if it could help with that as well.
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Lydia Bailey
•I'm skeptical about these AI tax tools. How accurate is it really? Did you double-check their recommendations with a professional? That's a pretty specific tax situation to trust to an algorithm.
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Eli Butler
•It absolutely works with other tax documents. I initially used it just for our mortgage situation, but ended up uploading our W-2s, 1099s, and even some investment statements. It's pretty comprehensive and handles most common tax situations including rental properties. As for accuracy, I was skeptical at first too. But I actually had our tax advisor review the recommendations, and they confirmed everything was correct. The system cites specific IRS publications and tax code sections for its recommendations, which gave me more confidence. It's not just making things up - it's analyzing based on actual tax law.
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Lydia Bailey
I was super skeptical about using taxr.ai at first (as you can see from my comment above!), but I decided to give it a try for my own MFS situation with student loans and mortgage interest. Honestly, it was eye-opening. The tool showed me exactly how to split our deductions and even pointed out that we needed to file Form 8958 to document our allocation - something I didn't even know about. The explanations cited IRS Publication 936 sections that specifically addressed our situation. What really impressed me was that it analyzed our loan documents and showed that even though only my spouse was on the 1098, I could still claim my portion of the interest because I'm on the deed and contribute to payments. Saved us about $2,400 in tax liability compared to how we were planning to file!
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Mateo Warren
If you're struggling to get clear answers from the IRS publications on this MFS mortgage interest split, I'd recommend trying Claimyr (https://claimyr.com). I was in the exact same situation last year - MFS filing for student loan purposes but unsure about mortgage interest allocation. After spending hours on hold with the IRS and getting nowhere, I used Claimyr and got connected to an actual IRS agent in about 20 minutes. They verified that my wife and I could each claim our proportional share of the mortgage interest up to our individual $375k limits. The agent even walked me through exactly how to document it on our returns. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c - basically saves you from the IRS hold time hell. Totally changed my view on dealing with tax questions.
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Sofia Price
•How does this Claimyr thing actually work? I don't understand how they can get you through to the IRS faster than calling yourself. Sounds like a scam to me.
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Alice Coleman
•Yeah right. I've been trying to reach the IRS for THREE MONTHS about an audit issue. No way some service can magically get me through when the IRS phone system is completely broken. If this worked, everyone would be using it.
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Mateo Warren
•It's actually pretty straightforward. They use an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, you get a call letting you know an agent is on the line. No magic - just technology handling the hold time instead of you having to do it. I was skeptical too but it's not about "cutting the line" - you still wait the same amount of time an IRS agent would take to become available. The difference is you're not actively sitting there listening to hold music for hours. I was cooking dinner when I got the call that an agent was ready to talk to me.
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Alice Coleman
Alright, I have to eat my words about Claimyr. After posting that skeptical comment, I was still desperate about my audit issue, so I figured I had nothing to lose by trying it. I've been calling the IRS for literally 3 months with no success - either couldn't get through or got disconnected after hours on hold. Used Claimyr yesterday, and I got a call back in 45 minutes with an actual IRS agent on the line. The agent was able to look up my case and explain exactly what documentation they needed to resolve my audit. For what it's worth, I asked the agent about the original poster's mortgage interest MFS question too. She confirmed that yes, MFS couples can each claim their portion of mortgage interest up to their individual $375k limits, as long as they can document who paid what. Totally worth it just for the peace of mind of getting a direct answer from the IRS.
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Owen Jenkins
Just wanted to add that my ex and I were in this exact situation when we were still married. We filed MFS for her student loans, and we each claimed half of the mortgage interest on our returns. Make absolutely sure you're splitting it based on who ACTUALLY paid what portion. We got audited because we just split it 50/50 on paper but didn't have good documentation showing my transfers to her account for my half. The IRS wanted to see bank statements showing my regular transfers that aligned with the mortgage payments. Also, remember that if one spouse itemizes, the other MUST also itemize even if taking the standard deduction would be better for them. That's one of the annoying MFS rules.
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Adrian Hughes
•Did you have to use any special forms to document the split when you both claimed part of the mortgage interest? Our tax software isn't very clear about how to handle this.
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Owen Jenkins
•Yes, you'll need to fill out Form 8958 (Allocation of Tax Amounts Between Certain Individuals Who File Separate Returns). This form lets you show exactly how you're splitting various items, including the mortgage interest. Most tax software should have this form available, though sometimes it's tucked away in a section for less common forms. If your software doesn't clearly guide you to it, search specifically for Form 8958 in the software. Also, keep all your documentation showing the transfers you make to your husband for your portion of the mortgage. Bank statements, Venmo/PayPal transfers, etc. - anything that creates a paper trail showing you're actually contributing to the payments. This is exactly what saved us during our audit.
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Lilah Brooks
Something nobody has mentioned yet - you should run the numbers BOTH ways before deciding to file MFS for student loan purposes. I did this last year and while my wife's student loan payments were lower with MFS, we ended up paying about $3,800 more in taxes compared to filing jointly. The tax hit came from: 1. Lower tax brackets for MFS filers 2. Loss of certain credits and deductions 3. Both having to itemize when only one of us had enough deductions to make it worthwhile Make sure the student loan payment reduction actually outweighs the increased tax burden!
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Jackson Carter
•This is really important advice! When I ran the numbers, our tax hit from MFS was about $2,200, but the student loan payment reduction was only saving about $1,800 annually. Totally not worth it in our case.
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Adrian Hughes
•We definitely did the math first! In our case, the student loan savings are substantial - about $7,300 per year in reduced payments - while the tax hit is around $2,100. So we're still ahead by filing separately. But you're right that everyone should calculate both scenarios before deciding. The mortgage interest deduction issue is just one piece of the puzzle.
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