Does it matter who claims the house?

[Roc A Bee]

This year my bf and I bought a house together. We are not married so we file taxes separately. I know we will both take the standard deduction, but we will also have a credit from the solar purchase. Does it matter which one of us claims it?

I’m not sure if it matters, but I file single. He files HoH and claims 1 child. We both are use to a modest tax refund ($1000ish)

[wanderingback]

Do you use an accountant? If so, I would ask them.
If you use the standard deduction then it probably won’t matter. But if it’s your first year owning the house you should probably confirm that standard deduction is still the best option.

My partner and I are in the same situation in that we’re not married but own a house together. However, he is self-employed and I also have 1099 income, so we don’t do the standard deductions, so we do split it per our accountant’s recommendation with how it works out better. We both use the same accountant so that helps.

[Roc A Bee]

We don’t have an accountant.

We did buy at the end of the year so only paid one month’s mortgage so definitely not more than the standard deduction.

Maybe I’ll run it both ways. I’m really curious about the credit as it’s 25-ish % of the cost of the solar.

[flygirl]

I would definitely run it both ways and see if one benefits more than the other. My guess is in a lot of cases you’ll both just take the standard deduction.

[awkwardpenguin]

Do you have separate finances? If so, whoever paid the expense gets the deduction. This is true for both the mortgage interest and the solar panels.

Honestly co-mingled but unmarried tax issues are a huge pain the ass. DW and I had to deal with all this until our marriage was federally recognized. This article is fairly helpful. www.thetaxadviser.com/issues/2017/apr/tax-issues-nontraditional-households.html

[TR]

A credit is different than a deduction right? It's just a flat amount off? So I would think it doesn't matter. If that's the case. I'm tax stupid so maybe I should even be in here lol

[jwright]

Assuming all the house expenses are from joint funds, it doesn't matter from the itemized deduction (interest/taxes) perspective as you both expect to itemize.

The credit would make a difference, but only from a cash flow perspective. The solar tax credit is not refundable but it can be carried forward. Therefore if one of you has a larger tax liability, you would be able to use more of the credit than the other. That would mean a bigger refund for one of you than the other; while the overall benefit is the same, the cash you receive now would be greater.

Also, the credit is set to expire in 2023. If you have a large credit but low income you may not be able to use the entire credit during that time. In that case it would make sense for the person with the higher tax liability to claim the credit.

If you are using a tax software, you can prepare each return with and without the credit before filing and see what result has a larger refund in the current year.

[ellipses84]

If you do your own taxes using software it’s easy to run it both ways and see who benefits more. If you split the cost equally, split that amount of the refund equally no matter what who claims it.

[livinthemiatalife]

I'm not sure about the credit, but I used turbo tax last year and we both "claimed" the house.  The question was worded something like "the amount of money you paid for X" so we each put half the amount from the appropriate tax forms since we split payments 50/50.

[Roc A Bee]

Thanks all! I ran it with me claiming the house and the tax and we will get the whole thing this year, no roll over.

It’s going to the backyard fund as we bought a new house and the yard is a dirt pile currently.