If we file Married Filing Separately, how does TurboTax determine which person claims the dependent? There doesn’t appear to be any option for this.

[bluedeb · Accepted solution]

Either you or your husband may claim the child on your tax return. Both of you cannot claim the same child. Most married taxpayers are better off filing jointly compared with filing separately. If you are filing separately, please consider using the Desktop version of TurboTax.

Consequences of filing your tax returns separately

On the other hand, couples who file separately receive few tax considerations. Separate tax returns may give you a higher tax with a higher tax rate. The standard deduction for separate filers is far lower than that offered to joint filers.

• In 2021, married filing separately taxpayers only receive a standard deduction of $12,550 compared to the $25,100 offered to those who filed jointly.
• If you file a separate return from your spouse, you are 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.

[xmasbaby0]

TurboTax does not determine which one of you claims the dependent when you file MFS.   You and your spouse have to agree on it, or use the tie breaker rules if you cannot agree.   Which one of you has the higher AGI?  Are you living apart?  Does one of you have the child?   

If you lived apart for at least six months then one of you may be able to file as Head of Household and claim the child.

Am I Head of Household?

https://ttlc.intuit.com/questions/1894553-do-i-qualify-for-head-of-household

https://ttlc.intuit.com/questions/2900097-what-is-a-qualifying-person-for-head-of-household

If you qualify as Head of Household, when you enter your marital status (single or married filing separately) into MyInfo, and then enter your qualifying dependent, TurboTax will offer HOH as your filing status.

Or are you filing separate returns for some other reason?   MFS is usually the worst way to file.

If you were legally married at the end of 2021 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 $25,100 (+$1350 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]

there are tie-breaker rules for which parent can claim the child if they both qualify in the following order

1) the parent with whom the child  lived the greater portion of the year (count nights)

2) otherwise the parent with the highest adjusted gross income.

for 1, Turbotax has no way to determine this

for 2, Turbotax can not access the other spouses' return to see who has the higher AGI.