Can TurboTax Calculate Filing Jointly vs. Separately?

[TaxCurious3]

I have completed our taxes using Desktop TurboTax and have, as always, used Married Filing Jointly.

What I'd like to know if there's an *easy* way for TT to calculate whether filing Separately would be better (similar to how it computes whether Itemized or Standard Deductions are better). I can't believe it wouldn't do that, but nothing I can find seems to indicate it does.

It seems like most of the normal reasons for not filing separately (differing limits and deductions) wouldn't hurt us, and there seems to be some reason that filing separately would help (my wife inherited some taxable IRA money which didn't have taxes withheld and she would be a lower bracket).

I guess I could just do separate returns and compare, but a) why is TT not doing that automatically???, and b) I don't know how to compute things like:

• Who takes the deduction for our child?
• How do you divide things that are reported in both of our names (e.g. interest, dividends, mortgage interest, property taxes, charitable donations, state tax refunds from last year)?

There seem to be some online tools, but that would require re-entering all of my tax information...

[MonikaK1 · Accepted solution]

Depending on other factors, it may still be 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. In TurboTax Online, you can set up multiple user accounts and you are not charged a fee until such time as you are ready to file one of the returns. Or, you can use Online to test the scenarios and then return to the Desktop product to file the two returns. With Desktop, you can e-file up to 5 returns with one product; with Online, you would pay for each return.

As you noted, there can be many issues to consider individually in this decision, so the choice isn't automatic.

Click here for more information from TurboTax on how to decide which filing status to choose.

Click here for tax tips for community property states.

See this IRS FAQ on dependents.

Please see this article for more information on home mortgages. 

[TaxCurious3]

Thanks! I don't live in a community property state, and from what I can tell the differences in the tax benefits available in MFJ vs MFS wouldn't apply or wouldn't matter much. The biggest difference really seems to come down to the difference in tax brackets. But all things being equal, after looking at how the tax brackets are structured I don't think it would really help us after all.

I still think / wish TT Desktop could compute this, but maybe it's something that would so rarely make a difference that it's not worth developing.

Thanks again for the advice and links.

[jaded1]

A couple of notes:

1. If you live in a community property State, you DO NOT need to split income 50/50 per se. Spouses can choose to split income as they both see fit, including possibly classifying each of their income as their own as separate

2. Even if filing jointly is advantageous for a couple, a couple may still want to do a MFS vs. MFJ analysis to see who owed (or was refunded) more, who owed (or was refunded) less to ensure tax filing/returns were equitable to each

This is the main reason I still do not use TurboTax: the lack of a comparative analysis, allowing a couple to specify income division for each taxable income entry (e.g. each W2, each 1099-DIV, each 1099-MISC, etc.), being allowed to do an MFS vs. MFJ analysis out of the box, then allowing the couple to do their internal finances/planning more transparently and equitably