Which file jointly scenario pays more tax?

[huang8012]

Hi there, 

Which file jointly scenario pays more tax: 

1. husband and wife each earn 200k

2. husband earn 400k and wife don't work

Thanks

[xmasbaby0]

If you were legally married at the end of 2024 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 $29,200 (+$1500 for each spouse 65 or older)  for 2024. 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 since with online, you get one return per fee.

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...

[huang8012]

But my question is for joint filing, whether there is any difference between these two scenario

[VolvoGirl]

No, it doesn't make a difference who has the income if you file a Joint return.  Except maybe for making IRA contributions.  

[JandKit]

Hi huang8012!

Thank you for this question:

I've looked at the scenario that you've posed. Whether the income is split between the two or earned by one or the other, the adjusted gross income is the same and the taxable income is the same. The filing status of married filing jointly applies regardless of whom the income is earned by.

I could see differences if you and your spouse completed separate returns. The results would be different

[xmasbaby0]

@huang8012 It is irrelevant on a joint return whether one spouse earned all of the income and the other did not earn a cent or if you earned equal amounts.     All of the income on a joint return is combined.  As VolvoGirl mentioned, the one difference might be the contribution that could be made to a retirement account.