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don64
Level 1
I know that only the mortgage interest is deductible so I am not sure whether or not I need to split it somehow. There is a way to split between business and personal but this does not really fit the bill because the mortgage payment is for my residential house which also happens to have my home office. I intend to itemize my deductions at the end of this year. So, any help or guidance would be much appreciated. Please keep in mind that I am working with Quickbooks Self-Employed which does not have Chart of Accounts or whatever that was discussed in other posts. Thanks.
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Best answer December 24, 2020

Best Answers
don64
Level 1

Dear Mary,

 

Thanks for your answer. However, it does not fully address the question and deviates into the discussion of a home office which was not part of the question, though, it is good to know and is indirectly relevant.

 

Having extensively discussed it with multiple QBSE agents, we finally figured it out. A home mortgage payment can be split into three parts or categories in QBSE: 1. Mortgage, 2. Mortgage interest and 3. Property Tax (home office). When TurboTax becomes available, one can itemize mortgage related expenses so that they are factored in as deductions. At least, this is how I see it and how to accomplish as such.

 

Hopefully, this might be useful for someone to know.

 

Good luck with the tax season!

 

Don.

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2 Comments
MaryLurleenM
Moderator

Hello there, don64,

 

You can split the payment and use the correct category for the transaction. For example, the mortgage interest amount is deductible. Then, the mortgage principal is not.

 

Have you also set up the home office in QBSE? If not, here's how:

  1. In QuickBooks Self-Employed, go to the Taxes menu.
  2. Select the Annual tab.
  3. Select the Home office expenses section.
  4. Select Add a home office or Current home office if you already entered the square footage.
  5. Select a tax year.
  6. Select the Simplified method or Regular method tab.
  7. Enter your estimated home office square footage.
  8. When you're done, select Save.

Here's an article to learn more: Categorize home office expenses and enter square footage in QuickBooks Self-Employed.

 

Also, I recommend checking with an accountant to make sure you're recording this correctly. 

 

Let me know if you have other questions.

don64
Level 1

Dear Mary,

 

Thanks for your answer. However, it does not fully address the question and deviates into the discussion of a home office which was not part of the question, though, it is good to know and is indirectly relevant.

 

Having extensively discussed it with multiple QBSE agents, we finally figured it out. A home mortgage payment can be split into three parts or categories in QBSE: 1. Mortgage, 2. Mortgage interest and 3. Property Tax (home office). When TurboTax becomes available, one can itemize mortgage related expenses so that they are factored in as deductions. At least, this is how I see it and how to accomplish as such.

 

Hopefully, this might be useful for someone to know.

 

Good luck with the tax season!

 

Don.

View solution in original post

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