married filing

[mere18]

Should my husband and I be filing our taxes together... what will yield best tax return amount?

We rent an apartment, and I typically have very simple taxes - nothing to claim or write off. I always get money back overall. He is in sales, so he typically owes.

[xmasbaby0]

If you were legally married at the end of 2022 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $25,900 (+$1400 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit. 

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

 If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[CatinaT1]

It is almost always better to file jointly.  There are some special circumstances where it is better to file separately. 

Here is a great article explaining the advantages of filing jointly and the consequences of filing separately.  It also gives you some instances when it might be better to file separately. 

Filing Jointly vs Separately 

[mere18]

Thanks -  yes legally married as of 2021. Filed separately last year but this year we were questioning it.

I don't believe we qualify for any of the credits (earned income credit, education credits, adoption credits, or deductions for student loan interest) anyway - not a tax person, I'm sure of all but earned income credit but I don't think so. 

Would joint filing still make most sense, most likely?

[VolvoGirl]

It should be better to file Joint.  You would have to compare all the returns.  

To compare Joint to MFS.  If you are using the Online version, do NOT change anything on your return.  You would have to start with a new account and do a test return.  You don't have to pay unless you want to print it out.  So you might need 3 accounts, one for Joint and two MFS, one for each spouse.

How to Compare Joint to Married Filing Separately

https://ttlc.intuit.com/community/married/help/how-can-we-compare-married-filing-jointly-with-marrie...

And what state are you in?  That can make a difference.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions on Schedule A then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  And if you are in a Community Property state it can be complicated to figure out.

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[DawnC]

It is usually better to file jointly.    You can use TurboTax to compare the difference between filing statuses.   If you have the desktop software, it is pretty easy to do.    You can use TurboTax Online to compare also, but it takes a little more time.   See this link for full details.  

[mere18]

thanks, @VolvoGirl   We are in NJ!  What do you take from that?

[RobertB4444]

That joint filing should still be the better choice overall.  You might not get a refund but your husband should owe significantly less than he would have otherwise.

@mere18

[Opus 17]

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@mere18 wrote:

Thanks -  yes legally married as of 2021. Filed separately last year but this year we were questioning it.

I don't believe we qualify for any of the credits (earned income credit, education credits, adoption credits, or deductions for student loan interest) anyway - not a tax person, I'm sure of all but earned income credit but I don't think so. 

Would joint filing still make most sense, most likely?

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Joint filing is almost always better, but the only way to know is to try it.  For example, there were a few years when my wife and I filed MFS because, even though we lost about $200 on the federal return, we gained $500 on our state return because of how the state tax brackets were different from the federal tax brackets.  You only know by testing different outcomes.

Remember that if your spouse "typically owes" and you typically get a refund, that just means you pay extra to the IRS during the year (by withholding) and he doesn't pay enough.

Also, be aware that if you file jointly, both taxpayers are jointly and equally liable for all tax facts claimed and all taxes owed.  If there is a problem later, the IRS can come after whoever has the most money, even if that was not the person with the problem.  So if one spouse was self-employed but working under the table or otherwise fudging their income, that might be a good reason to file separately.   I'm not saying that applies to you (or anyone else reading this); but it is the one legal reason that spouses might want to file separately even if it costs more in taxes.