Splitting a joint return to MFS

[JW231]

We filed a joint return last year but it probably makes more tax sense to file separately this year. We have several rental properties, so there will be a lot of detail, especially in one of the separate returns. 

Can I roll over last year’s return and prepare a joint return for this year, then have TurboTax split it?

Or roll over the joint return, delete one spouse’s data, and update the filing status? Can I then create a new return for the other spouse in my existing software?

I’m looking for the easiest way to handle this n TurboTax. 

Thanks. 

[TomD8]

See this TT help article:

How do I switch from filing jointly to filing separately? (intuit.com)

[xmasbaby0]

"Can I roll over last year’s return and prepare a joint return for this year, then have TurboTax split it?"

No.  You cannot just prepare a joint return and have TT "split" that return into separate returns.   If you choose MFS you each need your own returns prepared completely separately; if you use online software you need two accounts and you pay for each return.

"Or roll over the joint return, delete one spouse’s data, and update the filing status? Can I then create a new return for the other spouse in my existing software?"

It is very difficult to remove all of the "spouse stuff" from a transferred joint return.   If you want to switch to filing MFS then it is recommended that you start your separate return from scratch without trying to transfer last year's joint return tax file to begin it.

And.....filing separately is usually the worst way to file.   Make sure you really get better results by filing that way.   

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.

If you were legally married at the end of 2023 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 $27,700 (+$1500 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 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...