MFJ vs MFS and Amending

[mattslegacy]

I filed MFJ with my spouse, but now realize that it would have been better to file MFS. I realize that I need to fill out a 1040X and mail it in, and she will have to file her own 1040 and submit it online.

Does it matter what order we do it in? Because with her 1040, she'll owe money, and we'll have to submit payment online. With my 1040X, it could be weeks before I get my additional refund. 

[Opus 17]

To amend from MFJ to MFS, you must file both returns before the April 15 deadline.  After that date, changing MFJ to MFS is disallowed by law.

The person who is listed first (top line) of the MFJ return files an amended return as MFS, removing the spouse's income and deductions.  The spouse files an original MFS return in their own name, not an amended MFS return.  It doesn't matter the order, but you won't be able to e-file the new MFS return.  Both must be mailed (separate envelopes) by April 15.  Don't forget to also send the appropriate state returns.

Be aware that, if filing with Turbotax online, the new MFS return will require a separate account with a different user name and password. (It can use the same email address for notifications.). This account will also require a separate filing fee unless you qualify for a free return.  

Also, be aware that if one spouse itemizes deductions on their MFS return, the other spouse must also itemize, even if they don't have any deductions, and can't use the standard deduction.  This removes some of the advantage that people think they get if they don't prepare the MFS returns correctly.

[NCperson · Accepted solution]

Can you share with this forum what it is about your taxes that makes you think that filing separate is a better option

As noted by opus17, there are real pitfalls as you can lose certain benefits under single vs. joint

For example, no students- loan interest if filing married - seeparate is permitted

If itemizing, SALT is limited to $5,000 each and if one of you paid all the bills, only THAT person can deduct the property taxes or the contributions, etc.

Best to read the article link below

95% of the time filing joint is a better option

https://turbotax.intuit.com/tax-tips/marriage/should-you-and-your-spouse-file-taxes-jointly-or-separ...

[mattslegacy]

Thanks for the link to that article NCperson. I see now that it is NOT advantageous to file MFS. I have recently learned that there is only a $12K deduction vs $24K, and also, the brackets are much more generous for MFJ.

Thank you.

[NCperson]

Glad that this community was able to save you the headache and work that would have been for naught!

[1Kid4God]

We got married last year and this year is our 1st time filing married filing jointly.   Last year, I took the standard deduction whereas my spouse itemized. How do we answer the question what was last year's deduction?

[VolvoGirl]

Did you get married in 2019?  Did you both get state refunds on your 2018 returns?  And what do you want to know about Amending?  

TurboTax does not handle this. If you enter more than one state refund, it just adds them together. It does not ask separately for each refund whether you itemized last year. It just asks once after all the refunds have been entered. There is only one State and Local Income Tax Refund Worksheet, so there is no way to do the calculation separately for the taxpayer and spouse. The help for the worksheet even says that a change in marital status from last year is one of the situations it does not handle.

So either.....
If you both itemized deductions last year then add them together and enter it.
If you both took the standard deduction last year add them together and enter it.
If one person took itemized deductions and the other one took the standard deduction then only enter the one that itemized deductions.

And answer the follow up questions.

[1Kid4God]

Yes, we got married January 1, 2019, we both had houses prior to marriage, he itemized & I took the standard deduction last year (April 2019) as I didn't quite have a full year of mortgage interest to deduct due to the home loan being new.  Do I only include his totals in the figures in the following questions or both mine & his although I didn't itemized?

I've amended a few returns.

[JamesG1]

You may deduct mortgage interest on two homes.  See IRS Publication 936 below:

• Main home - You can have only one main home at any one time. This is the home where you ordinarily live most of the time.
• Second home - A second home is a home that you choose to treat as your second home.
• Second home not rented out - If you have a second home that you don’t hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You don't have to use the home during the year.

Are you renting out the second home?  If that home has not been sold and has been converted to rental property, then the mortgage interest likely is offset against the rental income on 1040 Schedule E.