If you own a home with someone else, it can be difficult at tax time to determine who receives the deductions. Consulting a professional is always the best thing to do for gray areas. For some quick joint home ownership tax tips, read on.

Determine what type of joint ownership you have

First of all, it is important to know what type of joint property you have acquired. In a “joint tenants with right of survivorship” (JTWROS) each owner is considered to have 100% ownership of the property. In this situation, if one tenant dies, the other remains the owner of the entire property by simply removing the name of the deceased from the deed. In a “common tenant” (TIC) situation, each person is considered to own a certain percentage of the distributed home at the time of purchase. This is usually a 50/50 situation, but not always, since the percentages are determined by the contribution of each one at the time of purchase. When a tenant dies, their share of the property goes to whoever left it and all the benefits that come with it. Also, one tenant can sell his share of the property without the other’s approval.

Tax tips for joint home ownership

For tax purposes, if you are a joint tenant with a right of survivorship, tax deductible expenses must be claimed by the person who actually pays them.

For married couples filing jointly, you simply need to deduct the mortgage interest from your total combined income.

If you apply separately from the other homeowner, you must claim the part of the deductions you pay and only the ones you pay.

In a common tenant scenario, your tax deductions should be deducted according to the percentage of property you own.

Another great joint home ownership tax tip that applies to couples is this; Allow the person with the highest net income to make higher payments towards the house. This allows them to take the full deduction and results in improved tax exemption benefits on the principle and interest refunded. The fact that one partner pays significantly more or all of the house payment can easily be offset if the other partner is solely responsible for other bills in the home.

Tax tip bonus

For incredible savings at tax time, many people start their own business from home. Something like an online business where you work a few hours a week can not only generate a considerable amount of additional income, but it can also provide you with huge tax write-offs. When you run any type of business from home, you can pay off a portion of your mortgage, property taxes, and utility bills. If you have an online business, you can write off the costs of the internet, the computer, and any office furniture you may need. This adds up to some great savings at tax time, not to mention the extra income for a rainy day!