topic Re: File separate or joint? in Get your taxes done using TurboTax

File separate or joint?

Slow2speak8982 — Fri, 22 Nov 2024 17:00:45 GMT

I have a quick question. I work full time but my wife is enrolled in full time college and is unemployed. (using Chapter 35, my VA benefits). Would it be recommended to file jointly or separate so she can get her $1,000 credit and we can still receive our yearly tax return for 2024? I hope I asked this question correctly

Thank you so much

Re: File separate or joint?

xmasbaby0 — Fri, 22 Nov 2024 17:04:36 GMT

Not sure what $1000 credit you are referring to.....but if you mean the American Opportunity Tax Credit---she would not be eligible for any kind of education credit if you file married filing separately.

If you were legally married at the end of 2024 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 $29,200 (+ $1550 for each spouse 65 or older) for 2024. 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 since with online, you get one return per fee.

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-separately

Re: File separate or joint?

xmasbaby0 — Fri, 22 Nov 2024 17:27:06 GMT

Please note that filing married filing separately means you are not eligible for education credits.

https://ttlc.intuit.com/questions/3262983-who-is-eligible-to-take-the-american-opportunity-tax-credit

https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit

https://ttlc.intuit.com/questions/3383321-why-didn-t-i-get-a-credit-or-deduction-for-education-expenses

https://ttlc.intuit.com/questions/1901172-what-are-education-tax-credits

https://ttlc.intuit.com/questions/1901172-what-education-tax-credits-are-available

Re: File separate or joint?

Opus 17 — Fri, 22 Nov 2024 23:21:38 GMT

There's no magic $1000 credit for college. The rules are very restrictive, and in this specific case, married filing separately is an automatic disqualification for any credit. Also, she can't get the credit if she doesn't pay qualified education expenses (because the VA covers it).

If she is paying qualified education expenses, I see no reason she would not be eligible for either the AOTC or the Lifetime Learning credit on a joint return, unless you know of some other factors. For the AOTC, qualified expenses include tuition, any fees that are required for her course of study, and any books or materials required for her course of study, even if not paid to the school. For the lifetime learning credit, allowable expenses are tuition, fees books and materials but only if required to be bought from or paid to the school directly.