How does filing status effect my form 1098? My wife and I live in the same house but file Married/filing separately.

[Mr--Tyler]

How do we divide the information on our Form 1098 Mortgage Interest Statement?

[xmasbaby0]

If you are filing separate returns, then the two of you can divide up the amount of mortgage interest and property tax paid in 2019 in whatever way is agreeable to you -- as long as no more than 100% is claimed when you add up what each of you claims.

But why are you filing separate returns-----the worst way to file?

If you were legally married at the end of 2019 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 $24,400 (+$1300 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...

[Mr--Tyler]

Thank you so much for your response. That's what I thought. This isn't my first year filing separately. but when I place half the interest paid, turbo then asks, "Is this the same amount that's on the form?" When I respond 'no', then a lot of other questions start to follow, which makes me think, 'am I doing something wrong?'

Your second question is a dosey. First, let me preface, 'I LOVE MY WIFE.' But my wife and I look at tax refunds very differently. I HATE the idea of getting a large tax refund. To me, that means I gave the government (whom I also respect) an interest-free loan. On the other hand, my wife sets her deductibles to near 0, so she can get the most in tax refunds👎🤐😫. She suggested we file separately.

[xmasbaby0]

Guess your spouse needs some financial tutoring.  Good luck.  Maybe if you show her in black and white how filing MFS impacts you....

It is not easy to compare MFJ to MFS using online TT but you can do it.  Since you only get one return for each account and user ID, you have to use 3 accounts and user ID’s—one for MFJ and two for each of the MFS returns.  Compare, choose, and file—and pay—accordingly.

It is much easier to do this comparison using the desktop version of TT installed from a CD or downloaded to your own computer.  You pay once for the software and you can prepare multiple returns easily, and it has a “what if” feature that allows comparisons.

[VolvoGirl]

Have you prepared a Joint return to compare?  If you are doing separate returns you really should use the Desktop program.  It can do unlimited returns and efile 5.  It has a What-If worksheet where you can compare Joint to MFS.

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-...

COMPARE JOINT TO MSF

To compare Joint to MFS.  If you are using the Online version, do NOT change anything on your return.  You would have to start with a new account and do a test return.  You don't have to pay unless you want to print it out.  So you might need 3 accounts, one for Joint and two MFS, one for each spouse.

How to Compare Joint to Married Filing Separately

https://ttlc.intuit.com/community/married/help/how-can-we-compare-married-filing-jointly-with-marrie...

How to start another return in the Online version

https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-start-another-return-in-turbotax-onli...

[NCperson]

96% of married couples file JOINT.... the laws are set to motivate that.

the issue is NOT how big a refund you get back, the issue is how much tax liability there is.....

look at Line 16 on the form 1040.  That is the total TAX you owe.  But for most married couples, this line will be higher if you add together your two individual returns (filing Married Filing - Separate), than if you filed together "joint"

The IRS "loves" when folks file married- separately... they get a lot more money that way (in most cases) 🙂 

if you don't like giving the IRS an interest free loan, then i suspect you don't like giving them 'free money', which is what normally happens if you file married-separate. 

as other suggested, set up your returns as if you were filing separate and then do it filing joint - watch what happens.   Please report back to us and let us know how much you save by filing joint