After you file

There is something very odd here.

 

Firstly, why did your wife file MFS?  Did her accountant advise her to file that way, and why?  Or did he file that way without asking?  If the accountant filed that way without asking, they should fix their mistake for free.

 

Note that there is nothing special about a personal tax return when you own an S-corp.  The S-copr must file a separate return, form 1120-S.  Every employee of the S-corp, including the owner, must get a W-2 for wages, and that is reported on a form 1040 personal return.  There's no automatic reason why your wife would need to file separately.  There are some possible reasons why that advice might be given, and you need to know why she filed that way.  Accident or on purpose, and why.

 

Second, did you also file MFS (married filing separately)?  And you itemized, which was lower and cost you some taxes?

 

Third, you should be able to amend your return from MFS itemized, to MFS standard deduction, with no trouble, I see you have already been given the instructions.

 

Fourth, however, it is the spouse who itemizes who controls.  This is often misunderstood.  If you filed MFS itemized, even if your itemized deductions are small, then your wife is forced to file itemized deductions.  The itemizing spouse controls.  If you do nothing, your wife will get a letter and tax assessment, not you.  If you amend to MFS standard deduction, and your wife claimed the standard deduction also, that will clear the conflict. But it will take 16-20 weeks to process the amended return, and your wife may still get an assessment in the mean time.  She can respond with a letter of explanation and include a copy of your amended return.

 

Fifth, and most important, if you decide to amend to file as married filing jointly, the spouse who files the amended return (converting MFS to MFJ) must include all the information for their spouse including income, deductions and credits.  Filing the amended MFJ return will automatically cancel both MFS returns.

 

Lastly, if you decide to amend to change from MFS to MFJ, it will probably be easier to have the accountant file an amended return for your wife to change your wife to MFJ and include your income and deduction information.  They should do that for free if it was their mistake to file separately.  However, as I said before, you need to understand why she filed MFS -- maybe there was a business or financial risk of filing jointly that you need to discuss.