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.
Just using the Turbo Tax software when i filed it as jointly we were looking at $400 return from feds and paying in $270 to the state. When i picked it as married, filing separately the return jumped to $1200 federal and $850 state return. That is why i am wondering if the best option for us IS filing separately because it appears our tax liability is lower that way. It also said our son can be a dependent.
What do you mean "picked it as MFS?" Did you prepare TWO tax returns--one for each of you? Did you follow the rules and and did each of your either use standard deduction or each of you itemize?
Please explain exactly what you did to change from the joint return to separate returns.
i was able to go back to the type of filing at pick Married, Filing separately and it recalculates the information based on that. None of the income information or dependent information changed. It still showed both of our incomes and from what i can tell of the information Turbo Tax is giving me it adjusts the return based on whether we are MFJ or MFS.
so far it's a standard deduction. We didn't have enough side expenses/medical/etc to file with an itemized deduction. So far nothing has been filed i'm just inputting information.
BUT----you did not answer the most important thing--are you preparing TWO returns? You cannot just click on joint or separate on the same return and see accurate results.
It is not easy to compare MFJ to MFS using online TT but you can do it. Since you only get one return for each account and user ID, you have to use 3 accounts and user ID’s—one for MFJ and two for each of the MFS returns. Compare, choose, and file—and pay—accordingly.
It is much easier to do this comparison using the desktop version of TT installed from a CD or downloaded to your own computer. You pay once for the software and you can prepare multiple returns easily, and it has a “what if” feature that allows comparisons.