Turbo tax didn't recognize that filing separately was better

[lwarren706]

I played with filing separately vs filing jointly just to see what the differences were.  It turned out that separately was substantially better for us.  Why didn't the software recognize that??  All these years I have been using TurboTax perhaps wrongly.  Maybe I didn't do something right???  

[xmasbaby0]

TurboTax does not do that comparison for you.   if you want to compare MFJ to MFS you have to do that yourself.   People have all kinds of reasons for filing jointly or separately--comparing the two is not something the software does automatically for you.

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 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...

You cannot amend a past year joint return to file separately.   But you can amend past year separate returns to file jointly.

[JohnB5677]

With rare exceptions filing jointly is superior to filing separately.

I'd like you to confirm two things:

1. If one of you used itemized deductions, you both have to use itemized deductions. 
   1. This generally results in a "0" deduction for one partner.
   2. You can not have one use the standard deduction and the other itemize.
2. Be sure that you are filing Married Filing Separately, and not as Single.

[VolvoGirl]

And don't just change the info in the same account to compare them.  You need to do 3 returns in 3 different accounts.  One for Joint and 1 each for the separate returns.  That's why it's better to use the Desktop installed program.

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong. If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….
https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

[lwarren706]

Yes I am using the desktop version.  I put in our real name and info in the filing jointly version and it said basically based on the information filing jointly would be the best.  THEN I put in only partial names but other info the same (age, state, etc) filing separately but married doing 2 DIFFERENT returns and it also said it was best to file separately.  (although it was saving us about $2,000).  So all the important information in all 3 of the returns was the same.  That is my challenge.  I hope I am being clear in what I am writing.  We have basically NO deductions being retired and the very few deductions don't add up enough to itemize and haven't for years now.  Sadly I think I have been relying on the wrong tax help over the years.  I want SOMEONE to tell me I have been ok instead of wasting thousands of dollars every year!!  I just wish I had gone through the efforts of looking at filing separately the last few years.

[ThomasM125]

It is unusual for the married-filing separate option to be better than the married-joint option. Your income and deductions would be the same and the tax rates would be comparable. I suggest you add the entries on the individual returns together to make sure they equal the entries on the combined tax return. Also, make sure you chose the correct filing status on each return.