Filing Status - Social Security

[Mike8456]

My wife retired in 2020, and started to collect Social Security last year. This is her only source of income. Would I be correct in saying that we should file as "Married Filing Separately" since the total amount she made (just under $10,000) would NOT be taxed and she should NOT even have to file ?

Thanks,

Mike

[Mike9241 · Accepted solution]

probably no. while her tax may be 0 your tax will be higher if you MFS.   however,  the only way to be sure is to prepare a MFS for yourself and a joint return

[VolvoGirl]

No.  If you file separately she would still have to file even with no other income.

Unless you have a specific reason to file separate returns,

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[Mike8456]

Thank you  @Mike9241 and @VolvoGirl for the quick response ! I did create a MFS form, and it is quite a bit worse !

Mike8456