Expert: Glenn D Schnabel - 7/1/2009

Question
My husband and I are paying a mortgage on our primary home and write off the interest.  We are separating but buying another primary residence for each of us to live in.  We plan to still file jointly unless it's better to file separately.  Can we write off interest on two primary residences?

Answer
Julie,

If you file a joint tax return, then you can only have one principal residence. You can have a second home though. This would entitle you to write off the interest each year on your Schedule A Itemized deductions.

But you can only have one principal residence. If you file separately, you would have a higher tax liability. You would then each be able to claim a principal residence. The exemption when you dispose of it would not be the $500,000 if each of you file separately. You would end up geting 1/2 the exemption each.

Filing separately is a higher tax rate then married filing jointly.