Husband has an LLC, should I file separate?

[JMarieMerriman]

My husband is an independent contractor and has an LLC.  He doesn't save money to pay his taxes during the year and for 2021 we filed jointly and his business taxes ate up the refund we should have gotten from my income.  Should I file separately in 2022? 

[xmasbaby0]

If you were legally married at the end of 2022 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 $25,900 (+$1400 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...

[Mike9241]

other possible solutions - note there is no precise method

1) he should pay estimated taxes for his share of the taxes  

2) before filling calculate each one's share of the taxes and then have him reimburse you for his share.

he pays 100% of the self-employment taxes and then the regular income taxes are split in proportion to each one's share of taxable income. if you itemize deductions this will require a consensus on how to split them 

3) prepare two single returns or married filing separate returns then calculate his taxes by dividing his taxes by the total of the taxes on both returns multiplied by the tax liability on your joint return. a joint return is filed. you might need the desktop software to do this because there can be only one return in an online account. there may be issues in trying to prepare single or MFS returns because some items may be limited. 

unless both of you are separating your assets, the family will be in the same position regardless of how the taxes are split except there will be less in total if married  filing separate

[xmasbaby0]

@JMarieMerriman As pointed out by Champ Mike9241, you and your spouse are overdue for a conversation about your finances, in particular his failure to pay estimated quarterly tax throughout the year.   In addition to owing a lot of tax at tax time, he may be causing himself to owe an underpayment penalty at tax time, which also affects the two of you.  If he expects to owe at least $1000 at tax time he should be paying estimated quarterly payments.

Is your spouse new to being self-employed?  

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

[Opus 17]

You will almost alway pay more tax in aggregate filing separately.  His tax didn't "eat" your refund, your refund paid his tax bill.  This is a perfectly rational strategy and some couples do this.  Otherwise, he should have been making estimated payments throughout the year.  

Your tax at the end of the year will be whatever it will be, based on your income, deductions, and credits.  If you filed separately, you would get a refund but he would owe a huge tax bill, that has to be paid from somewhere, if not his business income, then your other household income. He may also owe penalties for not making estimated payments.

One reason to file separately (even though you will usually pay more tax overall) is that when you file jointly, you take joint and equal responsibility for everything listed on the tax return including his business income and expenses.  If he is not responsible, you may want to keep your taxes separate and not accept shared responsibility. But it will likely cost you.