topic Should I file married filing jointly or separately? in Get your taxes done using TurboTax

Should I file married filing jointly or separately?

Rosepedalsarah — Sun, 19 Jul 2020 20:14:58 GMT

My husband and I are wondering if we should file jointly or separately since we now have a son. My husband has child support from a previous relationship and therefore doesn't receive a refund. If we file jointly neither of us get our returns, but I have herd that if you file separately you cannot claim a dependent. Claiming our son would lessen our taxes I assume. What would be the best course of action for this situation?

Re: Should I file married filing jointly or separately?

macuser_22 — Sun, 19 Jul 2020 20:22:05 GMT

If you file MFS (Married Filing Separately) keep in mind that there are several limitations to MFS. Married filing Jointly is usually the better way to file.

A few of those limitations are: (see IRS Pub 17 for the full list

https://www.irs.gov/pub/irs-pdf/p17.pdf page 21

1. Your tax rate generally is higher than on a joint return.
2. Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
3. You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. For more information about these expenses, the credit, and the exclusion, see chapter 32.
4. You cannot take the earned income credit.
5. You cannot take the exclusion or credit for adoption expenses in most cases.
6. You cannot take the education credits (the American opportunity credit and lifetime learning credit) or the deduction for student loan interest.
7. You cannot exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
8. If you lived with your spouse at any time during the tax year:
a. You cannot claim the credit for the elderly or the disabled, and
b. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
9. The following credits and deductions are reduced at income levels half those for a joint return:
a. The child tax credit,
b. The retirement savings contributions credit,
10. Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
11. If your spouse itemizes deductions, you cannot claim the standard deduction. If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return.

- If you live in a community property state you must allocate community income between both spouses..
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- Community property states. If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. See Publication 555. http://www.irs.gov/publications/p555/index.html

See this TurboTax article for help with this.
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

Re: Should I file married filing jointly or separately?

DoninGA — Sun, 19 Jul 2020 20:22:11 GMT

Your best course of action is to file as Married Filing Jointly, even if one of you has little or no income. You receive the highest standard deduction when filing a MFJ.

If you choose to file as Married Filing Separately you will lose any Child and Dependent Care Credit and the Earned Income Tax Credit (if eligible). Also the Child Tax Credit is cut in half.

You can claim a child as a dependent if you file separately, but on only one of you can claim the child on their tax return.

See this TurboTax support FAQ for filing jointly versus separately - https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-separately/01/25590

File Jointly and included with your tax return a Form 8379, Injured Spouse Allocation. So that your portion of the federal tax return is not seized.

See this TurboTax support FAQ for the Form 8379 - https://ttlc.intuit.com/community/accessing/help/how-do-i-file-form-8379-injured-spouse-allocation/01/26228

Re: Should I file married filing jointly or separately?

Rosepedalsarah — Sun, 19 Jul 2020 20:43:46 GMT

Wouldn't it be better for me to claim our son separately, since you said I can do that, and my husband's return be taken only? Or would it really cost us enough more in taxes that having a return wouldn't be worth it?

Re: Should I file married filing jointly or separately?

DoninGA — Sun, 19 Jul 2020 21:12:08 GMT

@Rosepedalsarah wrote:

Wouldn't it be better for me to claim our son separately, since you said I can do that, and my husband's return be taken only? Or would it really cost us enough more in taxes that having a return wouldn't be worth it?

In most cases filing jointly and including the Form 8379 with the tax return will be less costly to you then filing separately. The Form 8379 protects your portion of a joint tax refund from seizure for the back debts owed by your spouse.

And especially if you live in one of the Community Property states filing separately is much more complex.

Community property states - Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin

Re: Should I file married filing jointly or separately?

Rosepedalsarah — Sun, 19 Jul 2020 21:32:45 GMT

I did not know that form was an option, thank you for the information.