Joint vs Single filing

[ddhayes]

Married but each filing single. If we have joint accounts that produce income, and we get only one tax form, how do we split up the money on the tax filing? Just take half for each person? or if multiple accounts, try to split the accounts evenly? or??

[Critter]

OK ... let us get the terms correct ... if you are married you cannot file SINGLE ... It is either married filing jointly   OR  married filing separately.   And jointly is usually better ...  see the info below.

Now to your question ... when you have joint accounts ( and you do not live in a community property state) they can be divided in any way you can both agree on.  

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 $24,000 (+$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...

[DoninGA]

If you are legally married and have lived with your spouse at any time during the last six months of the year, you can only file as Married Filing Jointly or Married Filing Separately.  Filing as MFS in most cases is the worst way to file from a tax standpoint.

See this TurboTax support FAQ for filing jointly versus separately - https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

If you still decide to file as Married Filing Separately, then for all joint accounts you can split the income received any way that you want as long as it is not over 100% of the total income received.  Unless you live in a community property state, then other rules apply as stated in the support FAQ provided.

[ddhayes]

Thanks for the reply. I did indeed  mean married filing separately, not single. My bad.

[Hal_Al · Accepted solution]

When you have joint accounts ( and you do not live in a community property state) they can be divided in any way you can both agree on.  

But you do need to account for the "tax form" (e.g. 1099-INT) that was received under the SS# of one of you.  You do this by reporting all the income on your return, then taking a deduction for the "nominee" amount.  After entering your tax form (1099-INT) in TurboTax (TT), you will next encounter a screen titled "Tell us if any of these uncommon situations apply".  At that screen, check the box "I need to adjust the taxable amount".  On the next screen, "Report Interest Adjustment", enter the amount that the other spouse will be entering on his/her return and check the box "I received all or part of this interest for someone else (I am a nominee)".   TT will report the adjustment on Schedule B, so that only your share shows as net interest income.