Who legally claims mortgage interest on tax returns? Confused about interest deductions

This is a common question with a somewhat nuanced answer. The general rule is that mortgage interest can be claimed by the person who both paid the interest AND is legally obligated to pay the debt. Since your husband is the only one on the mortgage, he's the only one legally obligated to pay it. Even though you're making the payments from your account, the IRS considers those payments as gifts to your husband, who then uses them to pay his debt. This means technically your husband should be claiming the deduction on his return. However, there's an exception for married couples. If you're paying the mortgage from a joint account that both of you contribute to, then you could each claim a portion of the interest on your separate returns. But since you mentioned paying from your separate account, this exception likely doesn't apply to your situation.

I ran into almost this exact situation last year! I was so stressed trying to figure it out until I discovered taxr.ai (https://taxr.ai) which helped me sort through all the IRS rules. You just upload your documents, and their AI analyzes everything and gives you a clear explanation of your specific situation. In my case, I learned that what matters most is whose name is on the mortgage document and how you're filing. Their system explained exactly why my husband was entitled to the deduction even though I was making some payments. It saved us from potentially making a costly mistake that could have triggered an audit.

Just wanted to follow up about my experience with taxr.ai - I ended up trying it for my rental property situation and it was surprisingly helpful. I uploaded my mortgage documents, property tax statements, and expense records, and it gave me a detailed breakdown of what I could deduct. The analysis even caught that I was about to make a mistake with how I was categorizing some renovation expenses (turns out some needed to be depreciated rather than fully deducted). Definitely worth checking out if you're dealing with confusing tax situations like the mortgage interest question in this thread.

If you're having trouble getting a straight answer about your mortgage interest deduction, you might want to try calling the IRS directly. I know their phone lines are usually a nightmare, but I recently used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting for hours or days. They have a short demo video showing how it works: https://youtu.be/_kiP6q8DX5c I had a similar mortgage question (though in my case it was about a home equity loan), and the IRS rep was actually really helpful in explaining exactly how the interest deduction should be handled in my situation. They gave me the specific IRS publication number to reference if I ever got questioned about it.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it since I've been trying to reach the IRS for weeks about an issue with my tax transcript. It actually worked exactly as advertised. I got a call back connecting me to an IRS agent in about 20 minutes. The agent cleared up my question about mortgage interest deductions (turns out in my case I CAN claim the interest even though my partner is on the mortgage because we're legally co-owners of the property). Would have saved me hours of frustration if I'd known about this earlier. Just wanted to post this update since I was so publicly doubtful before.

Just to add another possibility - have you considered adding yourself to the mortgage through a refinance? Interest rates have come down a bit recently, and if your credit has improved, you might benefit from both of you being on the loan. That way the 1098 would show both names and eliminate this confusion in future years. We did this last year and it made our tax situation much cleaner. Plus we lowered our rate by almost a full percentage point, which more than made up for the refinance costs within 18 months.

Has anyone gotten audited over this mortgage interest issue? I've been claiming the mortgage interest on my separate return for years even though my husband is the only one on the loan. Now I'm worried I've been doing it wrong all along.

This is a tricky situation that many married couples face! Based on what you've described, since only your husband's name is on the mortgage and you file separately, he would typically be the one entitled to claim the mortgage interest deduction - even though you're making the payments. The IRS generally follows the rule that the person legally obligated to pay the debt (whose name is on the mortgage) gets to claim the deduction. When you pay from your separate account, they view it as you making payments on your husband's behalf. However, there are a few things to consider: 1. If you're both on the deed/title to the property, that could potentially change things 2. Some tax professionals argue there's room for interpretation when spouses have clear payment arrangements Given the $14,500 amount involved, I'd strongly recommend consulting with a tax professional or CPA who can review your specific documents and filing situation. The cost of professional advice would likely be worth it to avoid potential IRS issues down the road, especially since this affects multiple tax years. You might also want to consider whether filing jointly would be more beneficial overall, which would eliminate this particular issue entirely.