I started the Home and business filing jointly with my husband. Now, I am in doubt we should file separately since I have a cottage food business with a fictitious name?

valr688 — Tue, 04 Jun 2019 00:16:44 GMT

Generally, filing jointly will give you a bigger refund o...

ClarkeB — Tue, 04 Jun 2019 00:16:45 GMT

Generally, filing jointly will give you a bigger refund or less taxes due. When you file separately, your tax rate is higher and you won't be able to claim:

Education benefits
Earned Income Credit (EIC)
Child and Dependent Care Credit (usually)
Adoption Credit (usually)
The same benefit married filing jointly couples get for personal exemptions, itemized deductions, the Child Tax Credit, and capital losses (all of these deductions are reduced by half)
Itemized deductions if your spouse has already claimed the standard deduction, or the other way around.

The main reason you'd want to file separately is to protect yourself from inaccurate tax information reported by your spouse, or in cases where your spouse refuses to file a joint return (or refuses to file, period) and you don't want to get in trouble.

Also, when you file separately, your refund cannot be seized to pay off your spouse's debts. However, filing jointly as an innocent or injured spouse can head off refund seizures as well.

With all that in mind, you can try it both ways to see which filing status works out better for the both of you. If you do this, also consider your state return; in some cases, the taxes saved on the state return more than makes up for the money lost on the federal, or vice-versa.

You can try the different ways with TurboTax's free calculator TaxCaster. It will give you the estimated tax differences when filing either way.

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I started the Home and business filing jointly with my husband. Now, I am in doubt we should file separately since I have a cottage food business with a fictitious name?

Generally, filing jointly will give you a bigger refund o...