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New Member
posted May 31, 2019 11:27:02 PM

My wife is retired and I work full time. Can I file married separately to save paying the taxes on her social security income?

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4 Replies
Alumni
May 31, 2019 11:27:06 PM

No. There is a special "gotcha" that says that if you are married and live together, then if you file separately, the person receiving SS MUST consider that as gross income when deciding whether to file, and 85% of their SS benefit is immediately taxable. So, if you don't pay it she will have to. Now if you file jointly, then the amount of her SS that is taxable varies depending on how much other income that you have in total.

Each year you can choose to file as Married Filing Separately. However, that may not provide the benefit that you expect, and you will almost always end up paying more in tax than if you file jointly.
The Married Filing Separately filing status is very different than the Single filing status. There are a number of severe restrictions on deductions and credits, and on the amount of IRA contributions that you can deduct, especially if you live together with your spouse.
You can not take the EIC,
You can not take the credit for Child and Dependent Care, in most cases,
You can not take the Education credits/deductions, and there are many other restrictions.
 If either of you receive Social Security benefits and you live with your spouse, more of the SS benefit will be taxable, and the person receiving it will have to include the SS benefit in their gross income when determining whether they have to file. If one of you itemizes deductions, the other must also itemize even if they have nothing to itemize.

Before you decide, you should carefully read the restrictions that go with MFS in  IRS Pub. 501, at this link:
http://www.irs.gov/pub/irs-pdf/p501.pdf

You should carefully read the limits on IRA deductions in IRS Pub. 590-A at this link:
http://www.irs.gov/pub/irs-pdf/p590a.pdf

In addition, if you live in a Community Property state, there are special rules you must follow for reporting income and expense. For further information on that, see IRS Pub. 555, at this link:
http://www.irs.gov/pub/irs-pdf/p555.pdf

and/or the Turbotax FAQ at this link:
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

Level 1
Mar 8, 2022 8:53:36 PM

I am in the gotcha camp we got gotten. One working one retired on SSA or SSDI still not quite sure but believe it or not we do not live together. Can we use this fact to our taxvantage?

Expert Alumni
Mar 9, 2022 5:02:34 AM

If you live apart all year, you are not subject to the same rules. Your entire social security will not be taxable.

Level 1
Mar 9, 2022 2:27:09 PM

Thank you for the response. I think she has to enter "d" after SSA amt on 1040 Ln 6a. She might have a disability status as well. I will try to remember to update this thread once this is complete.