I usually file joint with my wife but she has more income this year and I am wondering if it would make more sense for us to file separately?

[xmasbaby0 · Accepted solution]

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...

[bluedeb · Accepted solution]

Usually, the best filing method would be Married Filing Joint.

For tax year 2022, most married couples under 65 filing a joint return receive a standard deduction of $25,900, while couples filing separately receive a standard deduction of $12,950.

• Joint filers usually receive higher income thresholds for certain tax breaks, such as the deduction for contributing to an IRA.

• If you’re married and file separately, you may face a higher tax rate and pay more tax.

• Filing separately may be a benefit if you have a large amount of out-of-pocket medical expenses. It may be easier to reach the 7.5% threshold of your adjusted gross income to qualify for medical deductions if you only claim one income.

Advantages of filing jointly

There are many advantages to filing a joint tax return with your spouse. Joint filers receive one of the largest standard deductions each year, allowing them to deduct a significant amount of income when calculating taxable income.

Couples who file together can usually qualify for multiple tax credits such as the:

• Earned Income Tax Credit
• American Opportunity and Lifetime Learning Education Tax Credits
• Exclusion or credit for adoption expenses
• Child and Dependent Care Tax Credit

Joint filers mostly receive higher income thresholds for certain taxes and deductions—this means they can often earn a larger amount of income and still potentially qualify for certain tax breaks.

Consequences of filing your tax returns separately

On the other hand, couples who file separately typically receive fewer tax benefits. Separate tax returns may result in more tax.

• In 2022, married filing separately taxpayers only receive a standard deduction of $12,950 compared to the $25,900 offered to those who filed jointly.
• If you file a separate return from your spouse, you are often automatically disqualified from several of the tax deductions and credits mentioned earlier.
• In addition, separate filers are usually limited to a smaller IRA contribution deduction.
• They also cannot take the deduction for student loan interest.
• The capital loss deduction limit is $1,500 each when filing separately, instead of $3,000 on a joint return.