Should I be filing married but separate?

[Kboi1122]

We started our taxes, and filed jointly, and when we completed everything it said we were getting $3100 less than last year. For the last 5 years we have consistently gotten a similar amount so we were shocked at this years amount being so much less. When I played around with our taxes a bit, I found that if I didn’t add my W2, just my husbands and my two children, we got a significant amount more, than when I added my W2. What would be the best way to maximize our return?

[xmasbaby0]

When you add a W-2 you are adding income.   More income = more tax.   That is normal.

https://ttlc.intuit.com/questions/2273878-why-did-my-refund-drop-when-i-entered-another-w-2

As for filing married filing jointly or filing married filing separately, usually joint is better.

If you were legally married at the end of 2021 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 $25,100 (+$1350 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...

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.

And....You say your refund was lower this year than last year.   Did you receive advance child tax credit payments between July and December?  If so, you received a big chunk of your 2021 tax refund in advance, so the amount you get with your tax return is naturally going to be less.

[Vanessa A]

Depending on your income level and his income, you  may or may not be better off filing separately. 

You would need to enter just your information and remove his W2s then add your refund or tax due to his refund or tax due.  Remember, you cannot claim the same kids.  One of you can claim one, while the other claims the other or one can just claim both kids. 

[Kboi1122]

He makes significantly more than I do. I just work part time. $1,600 seemed like a large drop with my W2 since we have made more in the past on his income, than with our combined income this year. When I just do his W2 and my children, the return is $9,762 and then I add my W2 it drops to $8,155. Which is still a great return but still very surprised at the drop from the prior years. We did receive the monthly child tax credits and that makes sense to see a drop because of that, but down to $8,155 seems like a lot.