topic Turbo Tax determining maximum deduction in Get your taxes done using TurboTax

Turbo Tax determining maximum deduction

guywithquestions — Sun, 07 Feb 2021 04:38:46 GMT

Hi,

Dual income no kids. Disparate high wage earners.

Turbo Tax picked married filing jointly and we owe a ton of federal tax, and get a very small state refund.
If I change filing status to married filing separate, federal tax liability goes way down, and state refund goes way up.

Why doesn't Turbo Tax pick the option for maximum refund? How do I know what is the right filing status?

Re: Turbo Tax determining maximum deduction

JohnB5677 — Sun, 07 Feb 2021 21:30:35 GMT

Please be cautious that you prepared your returns properly. When people try to switch from married to separate there are two mistakes that commonly occur.

Instead of Married Filing Separate they select Single.
They correctly file Married Filing Separate but do itemized for one and standard deduction for the other. You both have to use the same format.

Re: Turbo Tax determining maximum deduction

adrianlee2 — Sun, 21 Jan 2024 19:42:15 GMT

Can Turbo Tax deterimine if a couple would save money filing separately vs filing joint. If we input all of the info for both of us and corectly identify who the income and expenses are related to, why can't turbo tax able to prepare both versions? The tax program can help us to make sure we select Married filing separte, etc. and correctly audit check that both of thus selected standard vs itemized deduction.

Re: Turbo Tax determining maximum deduction

VolvoGirl — Sun, 21 Jan 2024 19:45:45 GMT

No, not that way. To compare Joint to MFS. If you are using the Online version, do NOT change anything on your return. You would have to start with a new account and do a test return. You don't have to pay unless you want to print it out. So you might need 3 accounts, one for Joint and two MFS, one for each spouse.

How to Compare Joint to Married Filing Separately

https://ttlc.intuit.com/community/married/help/how-can-we-compare-married-filing-jointly-with-married-filing-separately/00/26551

How to start another return in the Online version

https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-start-another-return-in-turbotax-online/00/25596

It would be better to use the Desktop CD/Download program. It can do unlimited returns and has a What If worksheet to compare them and many other advantages over the online version.

You can buy the Desktop CD/Download program here

https://turbotax.intuit.com/personal-taxes/cd-download/

Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns. And if you are using the Online version that means using 2 accounts and paying the fees twice.

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong. If one person itemizes deductions on Schedule A then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO! And if you are in a Community Property state it can be complicated to figure out.

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-separately/00/25590

Re: Turbo Tax determining maximum deduction

adrianlee2 — Tue, 23 Jan 2024 01:56:07 GMT

Thank you, I have the disk version and created 3 returns, one for me as married filing separate, one for my wife as the same and one for us as married filing joint. I was hoping Turbo tax could easily switch back and forth since my input (W2, 1099, etc.) is the same for both versions.