Unmarried Homeowners: How Do You Claim Your House on Your Taxes?

Tax deductions for unmarried homeowners
Brent and Amanda I under Creative Commons

Oh, homeownership. Buying a home yourself or with your spouse can be hard enough. But what about buying a house with a boyfriend or girlfriend — someone you’re not married to?

The finances of buying a house when you’re not married can be complex and frustrating, especially when it comes to tax day. If you’re trying figure out homeownership and taxes with your significant other, you’ll definitely want to check out Sarah Collins’ handy guide on The Billfold.

To do your taxes as unmarried homeowners, you’ll have two main considerations. While Collins’ advice applies best if one or both of you are freelancers or business owners, her situation can help you figure out how to claim your home and make the most of your tax deductions. Here’s what she suggests:

Who’s Claiming What?

First, you’ll need to decide who’s claiming the house on their tax return.

“If one of you is deriving the income from the house — think renting, working from home or running a business from the house,” Collins explains, “that person will want to claim the home so he or she can write off the many goodies like depreciation against that income.

She warns that once you decide who will claim the house, you’re basically stuck — you can’t decide to have the other person claim it next year. So think long and hard about the right option for your particular case.

If you want to share the benefits of claiming a home office or business space, you can take the simplified option for home office deduction and write off up to $1,500 each.

The second step talks more about deductions. If you’re each claiming a portion of the home, you’ll have to decide who’ll deduct things like mortgage insurance or mortgage interest.

Know When to Call In Help

Collins admits that she relies on an accountant — “She makes sure I’ve made all the right piles of paperwork,” Collins writes — and recommends that couples who decide to claim a home together do so as well.

Not only can an accountant best figure out how to save you money, but having a professional third party can keep you both from going crazy at tax time. “No matter how strong the relationship, sometimes it’s worth paying someone else to be a mediator/parent/adult,” Collins advises.

To get Collins’ full take on handling homeownership at tax time, visit The Billfold.

Your Turn: Have you purchased a house with your significant other without tying the knot? How did you decide who would claim your home?