Married filing separately vs. married filing jointly

I am married and have prepared joint tax return. However, I want ot be sure this is best option.  I make more than $100K and wife makes $15K and am wondering whether filing separately may be better. Most of our taxable investment accounts are joint. Is it legally permissible  to report 100% of the investment income on my wife's tax return, while taking 100% of the deductions in my tax return?"
  • our taxes are extremely straightforward (no property etc), and i'm not sure why when i try separate vs joint the separate option results in a few thousand dollares of savings?  any suggestions?
  • Without substantial itemized expenses, that would seem to be an impossible result.  I don't know how you are doing the trials.  If you have the desktop version, you might want to use it to do two complete Married Filing Separate returns and one Married Filing Joint and put them side by side.
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You will definitely be better off filing joint.  If you both file MFS an one itemizes then the other must also itemize.  Since you have the desktop edition, you can prepare a MFJ and two MFS returns and compare the outcome.  MFJ will be better.
  • Why is it better to file MFJ (Married filing joint?) Is it because they make more than $100K? Or because they have taxable invest accounts? What if my husband and I make less than $100k combined and we have no taxable investments? Or, to rephrase the question, when is it advisable to file MFS?   I have already posted 3 questions on my own with no answer yet.
  • The circumstances where MFS is better financially are vanishingly rare (unless you live in Ohio, I guess).  An example would be where both spouses have a lot of itemizable expenses, their incomes are similar, and one has lots of medical expense.  The advantage to filing jointly is especially large when the income of the two is very uneven, as in this case. Or where credits that would be available MFJ are not allowed for MFS.
    Married couples who are on the brink of divorce often file MFS due to their relationship.  
    As I said above, you can always try it both ways.  It's a bit of a bother, but educational.
  • Thank you for your reply.  I don't mind the bother, for the purpose of education.
  • And make sure that you include all sources of income and deductions when you make the comparison - and, if one itemizes the other does too.  Often people posting on this forum indicate that they have done the exercise and that MFS saves them money.  99% of the time that is because they have done the splitting apart improperly.  As Bob points out, it is extremely rare that MFS is the better option.
  • My wife did have considerable medical expenses in 2012. I am going through the exercise of comparing MFS vs MFJ on my desktop edition...but don't know how to allocate deductions (mtge interest, charitable contributions, etc.) or last year's state refund. Any advice?
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