Separate states and Homeowners deduction

Forum|Forum|3 years ago
October 15, 2022
1 reply
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Thank you in advance for your assistance. My wife is retired and we purchased a home in Florida. We are both from NJ. We have been filing, "Married, Jointly" since forever. She will soon be a Resident /Domiciled in Florida. I will remain in NJ working and living in an apartment. The question:

1-What are the benefits of filing, "Married-Separately"?

2- Would she be able to deduct the Real Estate Taxes?

3- She is retired and has no income, so what would be the purpose of Filing Separately? To take advantage of the Real estate deduction that would not effect her anyway?

4- In NJ, there is no Real Estate Deduction for a 2nd home. So should we just file Married-Jointly since there are no benefits until I become a Florida resident?

Best answer by xmasbaby0

Florida has no state income tax. So there is nothing for you to file in Florida.

If you were legally married at the end of 2022 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 $25,900 (+$1400 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-separately

X

xmasbaby0

Answer

Level 15

Florida has no state income tax. So there is nothing for you to file in Florida.

If you were legally married at the end of 2022 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 $25,900 (+$1400 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-separately

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

4

44619herman

Level 2

I am trying to help my sister out because we had a debate whether or not they need to pay Michigan income taxes. She and her husband own two houses, one in Michigan and another house in Florida. Her husband has declared residency in Florida while my sister is still a resident of Michigan. (She has a Michigan drivers license while he has a Florida drivers license). They claim the property tax exemption on their house in Michigan only. They both are retired and get social security along with rental income from a Florida condo that they still own.

I think for tax purposes, they claim that they live Florida so that they don't have to pay Florida state income taxes. However, they do not file nor pay any State of Michigan income taxes. I think that they since my sister is still a Michigan resident, they need to file Michigan income taxes even though her husband claims to be a resident of Florida. They file as married, filing jointly. If it matters, they both live together and travel between Michigan and Florida. Whats your opinion on this situation? Should they be required to file a state tax form in Michigan?