At What Point Does It Make Sense to File Taxes Separate Vs. Joint

[BWV Dreamin]

I am contemplating filing taxes single instead of joint. I am married, have no mortgage deduction, no child deductions or exemptions, and do not have any investments other than employer based 401k's, etc. At what point does it make more sense for my husband and I to file separately instead of jointly? Just because I am married do we HAVE to file jointly? The only deductions we can claim are personal property taxes and our personal exemptions.

 

[tlkscott]

I don't have an answer for you. However, I do know that Turbo Tax will tell you which way is better when you put in your info.

 

[Fire14]

I kow oe yr it was smarter for Dh and I to file seperate otherwise always been better jointly. I just run numbers both ways and decide. I have TT

 

[BWV Dreamin]

I don't have an answer for you. However, I do know that Turbo Tax will tell you which way is better when you put in your info.

Yeah! We use Turbo Tax but I never paid attention to the choice of filing separate vs. joint. Maybe this year it will suggest it!

 

[Cheshire Figment]

I have found that the only times it made financial sense to file separately was when my wife, who had the lower income, had very high medical bills not covered by insurance. Because of the 7.5% floor on medical deductions, filing a joint return would have significantly raised our total taxes.

I think that if you figure both ways you will find that it is to you benefit to file a joint return. If there is a large difference between the incomes it even makes more sense.

Note that if one of you itemizes, the other must also itemize.

Mike (CPA, Retired but still doing taxes professionally)

 

[BWV Dreamin]

So there's no rule that just because you are married you have to file joint? Also I am wondering if the standard deductions will be better than itemizing? I guess Turbo Tax will tell us that also? This is the first year that we will have hardly anything to write off.

 

[BWV Dreamin]

I have found that the only times it made financial sense to file separately was when my wife, who had the lower income, had very high medical bills not covered by insurance. Because of the 7.5% floor on medical deductions, filing a joint return would have significantly raised our total taxes.

I think that if you figure both ways you will find that it is to you benefit to file a joint return. If there is a large difference between the incomes it even makes more sense.

Note that if one of you itemizes, the other must also itemize.

Mike (CPA, Retired but still doing taxes professionally)

Ok! Well no high medical bills and husband makes significantly more than I do. Looks like it might be joint again.

 

[sonnyjane]

It's typically cheapest to file jointly. Exceptions would be if you each have a lot of itemized deductions, but usually you'll get more of a refund/owe less if you file jointly. As mentioned already, though, in TurboTax you can prepare both ways and compare the refund. For example if we would have filed separately this year we would owe $700. Instead we are getting a $1400 refund by filing jointly.

 

[BWV Dreamin]

Are there any other situations where filing separate is best? When one spouse is retired receiving a pension? If one spouse income falls below the minimum income level required to pay any taxes?

 

[sonnyjane]

Are there any other situations where filing separate is best? When one spouse is retired receiving a pension? If one spouse income falls below the minimum income level required to pay any taxes?

Possible, but everyone's tax situation has so many variables that you really have to compare. For example you can qualify for EIC if your combined income is below a certain figure also. Programs like TT make it easy to compare and see what would be best in each individual circumstance.

 

[Ali]

I did our taxes yesterday and when we file separately we had to pay 3000 and when it was joint we get 965 back. It just takes a half hour or less to plug the numbers into turbo tax so do it both ways to see what works best.

 

[LadyBeBop]

I notice you live in Maryland. I think that's one of the few states that requires couples who file joint with federal to also file joint with state. While it's usually more beneficial to file your federal returns as joint, in many states, it's more beneficial to file your state returns as separate. In your case, filing your federal and state returns as separate may be better.

Unfortunately, you'll have to crunch the numbers both ways.

 

[imsayin]

If you file married filing separately you lose the ability to qualify for several tax credits - dependent care, adoption, education, and some others. The majority of the time it makes sense to file together.

 

[ilovemk76]

I am contemplating filing taxes single instead of joint. I am married, have no mortgage deduction, no child deductions or exemptions, and do not have any investments other than employer based 401k's, etc. At what point does it make more sense for my husband and I to file separately instead of jointly? Just because I am married do we HAVE to file jointly? The only deductions we can claim are personal property taxes and our personal exemptions.

One reason - If one of you has most of the medical expenses and you will exceed the 7.5% of your personal income but not of your joint income.

 

[marius97]

I have found that the only times it made financial sense to file separately was when my wife, who had the lower income, had very high medical bills not covered by insurance. Because of the 7.5% floor on medical deductions, filing a joint return would have significantly raised our total taxes.

Note that if one of you itemizes, the other must also itemize.

Mike (CPA, Retired but still doing taxes professionally)

Darn you Cheshire...as a student studying accounting an taking a tax class right now, I was proud to know without you saying it that if one itemizes then both must itemize. Then you went and said it...oh well, maybe next time.

 

[BWV Dreamin]

I notice you live in Maryland. I think that's one of the few states that requires couples who file joint with federal to also file joint with state. While it's usually more beneficial to file your federal returns as joint, in many states, it's more beneficial to file your state returns as separate. In your case, filing your federal and state returns as separate may be better.

Unfortunately, you'll have to crunch the numbers both ways.

Thanks! Since TT imports all of the info for the state return, I don't recall an option to file separate. So that indeed may be the case, have to file joint for state if filed for federal. Our problem is we just do not have any large deductions anymore. But as many have said here, TT should tell us once all the data has been entered which is the better way to file.