If spouse has no income, but in 2019 inherited $25000 annuity, is it better to file separately for that year or stay jointly?

[cbcrewdawg-1]

The tax bill from inheritance will be less, but not sure it it offsets filing jointly.

[MinhT1]

Inheriting an annuity and not receiving any distribution from it in the year is not a reportable event. You only report distributions from the annuity.

In almost all situations, it is more beneficial to file Married Filing Jointly than Married Filing Separately.

Please read this TurboTax Help topic for more information.

You can also simulate your situation by creating mock TurboTax accounts and prepare mock tax returns to compare taxes between Married filing jointly and Married filing Separately before deciding on your filing status.

[Critter]

And most annuity distributions are not 100% taxable ... ask the account custodian for the taxable portion. 

[cbcrewdawg-1]

Thank you. Trying to search this out by error is daunting.  It looks like the distributable is >$24000, so now the trick is to figure out rough Federal and VA tax off that.

[cbcrewdawg-1]

Thanks. Will verify as only things semi-clear are share of distributable income (regular & AMT), exclusion items/share, interest income, non-qual dividends, qualified dividends.

[cbcrewdawg-1]

Follow up to previous...

Yes, after the excruciating pain of making detailed MFJ submission, saving/printing final product without filing and then starting "over" with MFS option, I could tell that just for me, while not saving a big amount, I was saving with MFJ. If you add the fact that with the amount inherited (not big but enough), spouse was likely going to have to pay a decent amount in Federal too since could only do itemized deduction (if one does, both have to), then on Federal alone MFJ was better.

Of course to do her state taxes (my state has no state tax), I had to additionally get & pay for more basic download version to do mock MFS submission for her so the information would populate the state submission properly, which due to nature of current filing rules, has to be by mail and actually after Fed Tax is filed. On the upside, based on all research, most states allow you to deduct one way in Federal and different way on State.

Thanks.