Solved: I thought filing jointly was better for married couples. However, just by adding my husband's w2 I went from receiving over 5,000 dollars to owing 1,739.
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I thought filing jointly was better for married couples. However, just by adding my husband's w2 I went from receiving over 5,000 dollars to owing 1,739.

That means we should file separately right?
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I thought filing jointly was better for married couples. However, just by adding my husband's w2 I went from receiving over 5,000 dollars to owing 1,739.

No, that doesn't mean that you should file separately. If you do that, you will almost always pay more in total tax. What is means is that you had unrealistic expectations. When you entered only one of your W-2s you were getting the benefit for the deductions for both of you. That is an unrealistic expectation. Your tax is calculated based on the total income for the both of you. Until you have entered all of that  the refund shown is not accurate for your total situation.

Each year you can choose to file as Married Filing Separately. However, that may not provide the benefit that you expect, and you will almost always end up paying more in tax than if you file jointly.
The Married Filing Separately filing status is very different than the Single filing status. There are a number of severe restrictions on deductions and credits, and on the amount of IRA contributions that you can deduct, especially if you live together with your spouse.
You can not take the EIC,
You can not take the credit for Child and Dependent Care, in most cases,
You can not take the Education credits/deductions, and there are many other restrictions.
 If either of you receive Social Security benefits and you live with your spouse, more of the SS benefit will be taxable, and the person receiving it will have to include the SS benefit in their gross income when determining whether they have to file. If one of you itemizes deductions, the other must also itemize even if they have nothing to itemize.

Before you decide, you should carefully read the restrictions that go with MFS in  IRS Pub. 501, at this link:
http://www.irs.gov/pub/irs-pdf/p501.pdf

You should carefully read the limits on IRA deductions in IRS Pub. 590-A at this link:
http://www.irs.gov/pub/irs-pdf/p590a.pdf

In addition, if you live in a Community Property state, there are special rules you must follow for reporting income and expense. For further information on that, see IRS Pub. 555, at this link:
http://www.irs.gov/pub/irs-pdf/p555.pdf

and/or the Turbotax FAQ at this link:
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

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Alumni

I thought filing jointly was better for married couples. However, just by adding my husband's w2 I went from receiving over 5,000 dollars to owing 1,739.

No, that doesn't mean that you should file separately. If you do that, you will almost always pay more in total tax. What is means is that you had unrealistic expectations. When you entered only one of your W-2s you were getting the benefit for the deductions for both of you. That is an unrealistic expectation. Your tax is calculated based on the total income for the both of you. Until you have entered all of that  the refund shown is not accurate for your total situation.

Each year you can choose to file as Married Filing Separately. However, that may not provide the benefit that you expect, and you will almost always end up paying more in tax than if you file jointly.
The Married Filing Separately filing status is very different than the Single filing status. There are a number of severe restrictions on deductions and credits, and on the amount of IRA contributions that you can deduct, especially if you live together with your spouse.
You can not take the EIC,
You can not take the credit for Child and Dependent Care, in most cases,
You can not take the Education credits/deductions, and there are many other restrictions.
 If either of you receive Social Security benefits and you live with your spouse, more of the SS benefit will be taxable, and the person receiving it will have to include the SS benefit in their gross income when determining whether they have to file. If one of you itemizes deductions, the other must also itemize even if they have nothing to itemize.

Before you decide, you should carefully read the restrictions that go with MFS in  IRS Pub. 501, at this link:
http://www.irs.gov/pub/irs-pdf/p501.pdf

You should carefully read the limits on IRA deductions in IRS Pub. 590-A at this link:
http://www.irs.gov/pub/irs-pdf/p590a.pdf

In addition, if you live in a Community Property state, there are special rules you must follow for reporting income and expense. For further information on that, see IRS Pub. 555, at this link:
http://www.irs.gov/pub/irs-pdf/p555.pdf

and/or the Turbotax FAQ at this link:
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

View solution in original post

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