2016 My husband filed married separate because I had IRA income while claiming our kids. Should I amend our 2016 or file by myself and eat the penalty?

[leahgiumelli]

What to do:

2016 My husband had employment income, I had IRA withdraw income. We decided to skip filing mine to avoid the tax penalty for a year. He filed, claimed our 2 children.

Should 2016 be amended, and we refile married jointly so that the penalty is reduced as much as possible. Does that even matter, because I will have to file married separate, with no income besides IRA withdraw.

[AmandaR1 · Accepted solution]

Yes, you should amend 2016. By far, the majority of the time, it will be more advantageous for you to file Married Filing Jointly vs. Married Filing Separate.  

You do have the option of filing Married Filing Separate if he did too, but it will most likely be to your benefit to amend.

You might want to test it out by updating your MFS return, but you'll need to use 2016 software. TurboTax has prior year software but it isn't online, so you can't test it out for free.  You'll find TurboTax 2016 software here: https://turbotax.intuit.com/personal-taxes/past-years-products/

If you used TurboTax in 2016, it will be easiest to amend your return (versus updating a 2016 MFS return). All you'll need to do is log into your 2016 account, select to amend, add your form and print and mail. Instructions for doing so are here: https://ttlc.intuit.com/replies/5114064

For more on understanding why married filing joint should be better for you, see here: https://ttlc.intuit.com/replies/3288477