cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 2

Will turbo tax check which is best for us. Married filing joint or married filing separate

We were married in June. This is a bad year as I started receiving my retirement benefits as well as working full time. He has a 6 figure income and received a big bonus this year. 
We have both been using Turbo Tax for years to file our taxes. He takes the itemized deductions on our home to keep our tax liabilty down. 
Question - when we do them this year does Turbo Tax have the software to check to see if married filing joint or married filing separate is best this year. 
I am extremely worried about our tax liability. 

3 Replies
Level 20

Will turbo tax check which is best for us. Married filing joint or married filing separate

The only real way to know for sure is to do it both ways with dummy returns.  Using the CD/download products are best and easiest to do that with.

 

If you file MFS (Married Filing Separately) keep in mind that there are several limitations to MFS.  Married filing Jointly is usually the better way to file.
 
A few of those limitations are: (see IRS Pub 17 for the full list

https://www.irs.gov/pub/irs-pdf/p17.pdf page 21

1. Your tax rate generally is higher than on a joint return.
2. Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
3. You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. For more information about these expenses, the credit, and the exclusion, see chapter 32.
4. You cannot take the earned income credit.
5. You cannot take the exclusion or credit for adoption expenses in most cases.
6. You cannot take the education credits (the American opportunity credit and lifetime learning credit) or the deduction for student loan interest.
7. You cannot exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
8. If you lived with your spouse at any time during the tax year:
a. You cannot claim the credit for the elderly or the disabled, and
b. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
9. The following credits and deductions are reduced at income levels half those for a joint return:
a. The child tax credit,
b. The retirement savings contributions credit,
10. Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
11. If your spouse itemizes deductions, you cannot claim the standard deduction. If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return.

- If you live in a community property state you must allocate community income between both spouses..
-
- Community property states.   If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin and file separately, your income may be considered separate income or community income for income tax purposes. See Publication 555. http://www.irs.gov/publications/p555/index.html

 
See this TurboTax article for help with this.
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

Level 18

Will turbo tax check which is best for us. Married filing joint or married filing separate

no. the software doesn't check to see if MFS is better than MFJ.  

Level 20

Will turbo tax check which is best for us. Married filing joint or married filing separate

You can use the What IF worksheets in the FORMS mode of the downloaded version ... go slow and read the screen to complete it correctly ...

 

What if MFJ VS MFS.PNG