Is the jacket on the couch yours or mine?
The word modified by on the couch is jacket.
On the couch is a prepositional phrase. A prepositional phrase is a phrase that starts with a preposition, in this case ON, and shows where an object is located, COUCH.
Where is the jacket? ON THE COUCH.
Prepositional phrase is composed of a preposition plus an optional modifier plus a noun or a pronoun or a gerund.