Married filing separately - how are joint income, deductions split

[rrobinsonsyl]

Trying Married - Filing Separately for the first time. How are income from joint investment and mortgage interest divided? Thanks.

[bluedeb · Accepted solution]

One of you can deduct the interest and investments or you can split the amount between you based on the amounts that you each paid. You both cannot take the entire amount. For Married Filing Separate you need to prepare two separate returns, one for you & one for your spouse.  To e-file, use your AGI from your prior year joint return, use the same amount for each of you, do not split it.

Generally, filing jointly will give you a bigger refund or less taxes due. When you file separately, your tax rate is higher and you won't be able to claim:

• Education benefits
• Earned Income Credit (EIC)
• Child and Dependent Care Credit (usually)
• Adoption Credit (usually)
• The same benefit married filing jointly couples get for personal exemptions, itemized deductions, the Child Tax Credit, and capital losses (all of these deductions are reduced by half)
• The standard deduction if your spouse is claiming itemized deductions

On top of that, if you live in the community property states of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, you have to deal with community property allocations and adjustments, which adds extra work and complexity to your tax preparation chores.

https://ttlc.intuit.com/replies/3288477

[NCperson]

96% of married couples file joint

Be careful on the deductions ... the community property states aside, it’s the person that actually writes the check who can take the deduction