Filing Status

[BW y LW]

We are retired on husband's pension & SS, and have a full-time home in Mexico.  We maintain voting residency in TX.  Wife lived in an apartment for partial year in CO to take care of grandson and earned small income, and not yet eligible for SS.  Wife will file separately so CO does not tax husband income.  Considering wife filing "Head of Household" in CO with herself and grandson as deduction, and husband filing "Married Separate" in TX with only himself as deduction.  Is there a better option to maximize grandson deduction and limit tax liability?

[ThomasM125]

Since Texas is a community property state, you will have to split your income and deductions between spouses on your federal return if you file married-separate. You have to file as married-separate on your federal return to do the same on your Colorado return.

It is hard to predict how this will effect your overall taxes, you would have to prepare your returns using different tax statuses to determine which is best for you.

[BW y LW]

Thank you.  Our plan is to put husband's income without wife's income on the Federal return, and put wife's income alone on the CO return with the grandson dependent.

[ThomasM125 · Accepted solution]

That may work for you, but you should prepare the return as married-joint to see what the overall tax is, as it may be better for you.

You can set up a new TurboTax account to do the married-joint return, and then simply not file it.

[BW y LW]

Joint return was FAR better because although the wife was an all-year resident of CO, the husband was only a partial-year resident.  Thank you.