John the third
Confused about dryer sheets
Not married, but have long term partner and we keep separate finances. We jointly own our home and both are on the mortgage debt. For 12 years, I was in a higher tax bracket, so I deducted 100% of the interest and property taxes while she took the standard deduction. We have a joint bank account which is used solely to pay for all our joint living expenses, including P&I, prop tax, insurance, HOA, utilities, groceries, eating out and entertainment. Round numbers, all this adds to $7k/month. When we bought our home, we both signed a simple letter saying the joint account would be funded $4000/mo by me and $3000 by her… and my contribution would be designated specifically to pay mortgage interest, property taxes, and whatever was remaining of my $4000 contribution would go toward all other expenses. Funds SHE contributed would specifically be designated to pay the insurance, HOA, groceries, etc etc. My name was first on the mortgage so the 1099-INT comes to me with my SSN on it. I retired in 2022 but she still works and earns a hefty W2 salary, so now we’d like to have HER itemize deductions and ME take the standard deduction. We signed a new letter agreement which says, starting 1/1/23, the funds SHE contributes into the joint account will be used to pay the mortgage interest and prop taxes, with whatever remains will be used for all the remaining expenses. My understanding is, to deduct interest and taxes, you must own the property, have a legal obligation to pay those items, and you must actually pay for the costs you are deducting. Does our letter agreement put us into a legal and acceptable position to now let HER itemize the deductions?