Tax law changes

Hi Raith,

Happy to assist with your questions! If you are married at the end of the tax year, usually 12/31, you may file Married Filing Jointly (MFJ) or Married Filing Separately (MFS). If you file MFJ, your income will be combined with your husband's income and the deductions will be combined as well. What do I mean by deductions? For example, if you use the Standard Deduction, it is $25,900 for Tax Year 2022 (this reduces your taxable income). Now, if you decide to file MFJ, your income and your husband's income as well as the deductions will be reported separately. The Standard Deduction that you'll each get in 2022 is $12,950. I would recommend you file based on the status that is more tax advantageous for both of you. To determine that, you can use our Tax Caster Calculator: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

As far as the Marketplace Insurance is concerned, you may file jointly, you'll just report the 1095-A which will contain your information only, on the 1040. Depending on your filing status, this may impact your taxes either with a credit or a balance due, without the numbers it is hard to say in this thread. However, make sure you are reporting any increases in pay to the marketplace, it will affect your taxes if you do  not. 

Now, you may get an IRA deduction on your tax return for up to $6,000 (and if you're 50 or older, $7,000) and as long as your Modified Adjusted Gross Income (AGI) is less than $129,000 for 2022. What's Modified AGI? Here's a link for additional information: https://www.investopedia.com/terms/m/magi.asp

If you are currently employed and are contributing to your 401(k), then it is helping you reduce your taxable wages already. If you are not working and not contributing, then the 401(k), will not help you in 2022, it is just sitting in your account. 

I hope we were able to answer all of your questions, if you feel you need additional information, please send us a message.

Cheers,

Laura