Maximizing Tax Benefits: Exploring Separate Filing Options for Dual-Income Couples

[hsyang]

My husband and I are both working and filed a joint tax form together. He is considering selling his stocks when he stops working, which means he wouldn't have any income when he sells the stocks. However, I will still be working and have my own income. Would it better for us if he files the taxes separately to keep the income tax rate lower?

[MonikaK1]

It depends. Depending on other factors, it may still be better to file jointly. 

If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), you will need to split your community income evenly even if filing separately; the rules vary by state. Also, some tax benefits aren't available for Separate filing status.

You can use TurboTax Online to test different scenarios before deciding to file jointly or separately. Click here for more information from TurboTax on how to decide which filing status to choose.

Click here for tax tips for community property states.