best filing status - spouse no longer works since COVID and is a FT student now

[jd202]

Hi there - my wife no longer works - has been out of work since 2020 - COVID lay offs. 

She decided to go back to school and has been a FT student since. What is the best filing status for me - continue to use married filing jointly, head of household or single and claim her as a dependent?

We have 2 kids. 

Please advise. 

Thanks,

JJ. 

[DoninGA]

A spouse is Never a dependent.  If you are legally married and living together you can only file as Married Filing Jointly or Married Filing Separately.  You should be filing as MFJ even if one spouse has little or no income.

[MonikaK1]

If you are married and living together, you can't use head of household or single filing status. Your only options are Married Filing Jointly or Married Filing Separately.

You can continue to file jointly regardless of which one of you has income from wages. Some credits are not available if you file separate returns.

Depending on other factors, is often better to file jointly. If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), you will need to split your community income evenly even if filing separately; the rules vary by state. Also, some tax benefits aren't available for Separate filing status.

You can use TurboTax Online to test different scenarios before deciding to file jointly or separately. Click here for more information from TurboTax on how to decide which filing status to choose.

@jd202 

[jd202]

Thanks - we live in California. 

[ErnieS0 · Accepted solution]

You would benefit from filing together if your spouse has no income. You can use the married filing jointly tax rate on one income, along with the joint standard deduction if you don’t itemize deductions.

Additionally, you can claim an education credit for your spouse’s tuition if you qualify.

As others pointed out, California is a community property state, meaning you would generally split everything 50/50 so there is no advantage to filing separately.