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Return went down by over $2000 after inputting my husband's income... I don't understand why. How do we know if it is better to file together or separately?

 
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Return went down by over $2000 after inputting my husband's income... I don't understand why. How do we know if it is better to file together or separately?

You tax is based on your total income, until you have entered all of your income, pay no attention to the refund meter, it shows the correct number only after you have entered all of your income and your deductions.

as to whether it is better to file MFJ or MFS,
When you use Turbotax Online version, there is no easy way to do that. You will need 3 separate accounts and you will need to prepare 3 different tax returns, one for MFJ, and one for each of you as MFS. That is a lot of work, before you do that consider this:

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

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Return went down by over $2000 after inputting my husband's income... I don't understand why. How do we know if it is better to file together or separately?

You tax is based on your total income, until you have entered all of your income, pay no attention to the refund meter, it shows the correct number only after you have entered all of your income and your deductions.

as to whether it is better to file MFJ or MFS,
When you use Turbotax Online version, there is no easy way to do that. You will need 3 separate accounts and you will need to prepare 3 different tax returns, one for MFJ, and one for each of you as MFS. That is a lot of work, before you do that consider this:

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
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