Married filing separately

[KrazeeTapper]

My fiance and I are considering filing separately once we're married to keep my student loan monthly payment costs down. However, is it true that neither one of us would be able to claim dependents once we have kids? I have read different things and I'm hoping for a straight answer. 

[VolvoGirl]

You can claim dependents when you file separately.  There are just some credits you can not claim like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  

[xmasbaby0]

Here are some more details about the differences between MFS and MFJ.  Some people get so focused on the amount they want to pay for student loans that they overlook the tax benefits they forfeit by filing separate returns.  When the time comes, you should really calculate it both ways to see what really makes sense for you.

If you were legally married at the end of 2019 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 $24,400 (+$1300 for each spouse 65 or older)  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.

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-separ...

[lidkell]

My daughter is 22 and goes to college full time. She got married last March to a marine. He has been deployed in the middle east for most of the year. They have not lived together and he hasn't paid for any of her expenses. She worked part time to help pay for some of her school bills very minimum. I understands she has to file married jointly or seperately but how do they do that. Do they file married jointly and only claim her W-2 information on her part time job? Also mark on her return yes someone else can claim her? I assume as her parent and that we have paid for all her expenses and tuition that I can still claim her on our taxes for dependent and college credit, is that correct? Thanks.

[Critter]

They have not lived together and he hasn't paid for any of her expenses.  Immaterial since they are married.

She worked part time to help pay for some of her school bills very minimum. I understands she has to file married jointly or seperately but how do they do that. Do they file married jointly and only claim her W-2 information on her part time job?  If they file jointly then ALL of BOTH their incomes are entered on the same tax return.   She had every right to file a joint return if she agrees to do so and there is nothing you can do about this.

Also mark on her return yes someone else can claim her?  If she files jointly then this is not an option.  You can only claim her on your return if they  both  file separately AND neither of them are required to file a return and they only file to get a refund of withheld taxes ... fairly certain that the Marine will not pass this test.

I assume as her parent and that we have paid for all her expenses and tuition that I can still claim her on our taxes for dependent and college credit, is   correct?    Your assumption is incorrect ... as mentioned above you can only claim her if she files separately  AND  both of them are not required to file a return(even if they do to get the withholding refunded).

Before anyone files a return I highly suggest you seek local professional guidance so that all parties in this tax year file correctly.  

[ReginaM]

Yes, you can claim your daughter as a dependent if she is a qualifying child, provided that she does not file Married Filing Joint with her husband. 

 IRS Publication 17 Table 3.1 identifies a qualifying child as follows:  Note that all five requirements must be met.

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half -sister, stepbrother, step-sister, or a descendant of any of them.

2. The child must be:

(a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), or

(b) under age 24 at the end of the year, a student, and younger than you (or your spouse, if

(c) any age if permanently and totally disabled.

3. The child must have lived with you for more than half of the year.

4. The child must not have provided more than half of his or her own support for the year.

5. The child must not be filing a joint return for the year (unless that return is filed only to get a refund of income tax withheld or estimated tax paid).

Publication 17 Tables 2.1 and 3.1 are extremely helpful. 

Should you have any further questions in regards to your concern, please respond to this thread.