In a somewhat remarkable ruling the 9th Circuit ruled in the case of Sophy v. Commissioner that unmarried couples living together and both owning the same residence, each get to deduct the entire amount of mortgage interest not one-half. So, let’s say that you have a $1 Million mortgage and the interest was $30,000 for the year. Inhabitant #1 gets to deduct $30,000. Inhabitant #2 gets to deduct $30,000. Now by failing to get married, each would be taxed at single filer rates and there would be no multiplication of exemptions. So, you have to run the numbers to see if this works for your situation. Further, the IRS acquiesced in the decision in AOD 2016-02. Obviously you would lose other benefits in estate taxes, social security survivor benefits, IRA rollovers and otherwise by not being married. Additionally those living in the 7 jurisdictions which adhere to common law marriages, still have to tread carefully that you are not deemed to be married.
That said, the marriage “penalty” just got worse.