Filing Jointly (Texas), Wife worked half year (had a baby)

[jose793151]

Hello, I was wondering how it works when wife has worked every year we have been married, so we have filed Jointly every year. Would we still do the same or would I file as head of house hold since she has not worked for the entire year? Not sure how it works, any help is appreciated.

[xmasbaby0]

File a joint return.   A married couple can file a joint return even if one spouse had little or no income.  Head of household does not fit your situation AT ALL.   HOH is a filing status used by a single parent or someone who is unmarried/considered to be unmarried but is supporting a qualified dependent.   

If you were legally married at the end of 2023 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 $27,700 (+$1500 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 since with online, you get one return per fee.

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...

[xmasbaby0]

And...just to be crystal clear--you never claim a spouse as a dependent.  You can claim your child as a dependent on the joint return.

[Opus 17]

Simple answer: When you are married, you always have the option of filing jointly, even when your incomes are very different, or one spouse is out of work or retired.  Joint filing almost always results in lower tax because many credits and deductions are reduced or disallowed for married filing separately.

Head of household is never allowed unless you are going through a marital separation.  HOH does not mean "head of the family" -- it is a special status for single parents who were never married, or due to separation or divorce.  

Your other option is married filing separately.  Very rarely, married filing separately is slightly more advantageous because in some states, filing MFS means you pay less state income tax even though you pay more federal income tax.  But that is not an issue in Texas, and in other states, the scenarios have to be carefully tested and compared.