If you are married according to Federal law, you have a choice when selecting your filing status. You can either choose Married Filing Jointly (MFJ) or Married Filing Separately (MFS). One common question that often comes up is “Which one is best for me?”
As with most tax related questions, the answers starts with “It depends.” First, make sure you are married according to Federal law.
For Federal taxes, you are considered married if on the last day of the year you are married and living together. This includes common law marriages that are recognized in the state where you now live or in the state where the common law marriage began. Even if living apart, on the last day of the year you are considered married if there is no legal decree of divorce or separate maintenance.
While some states have recognized same-sex marriages, partnerships, and/or unions for some time, the IRS only recently started recognizing legal marriages for same-sex partners. More information.
The following sections describe some benefits and pitfalls of choosing MFJ vs. MFS. Sometimes the only way to determine the best way is to try both and compare the results. The last heading shows how to run a comparison of filing separately vs. jointly using turboTax to see which is best for you.Married Filing Separately limits deductions and credits
Married Filing Separately (MFS) taxpayers may not be eligible to claim the following tax benefits:
- Tuition and fees deduction
- Student loan interest deduction
- Tax-free exclusion of US bond interest
- Tax-free exclusion of Social Security Benefits
- Credit for the Elderly and Disabled
- Child and Dependent Care Credit
- Earned Income Credit
- Education Credits
Other drawbacks of Married Filing Separately:
- Taxpayers have a much lower income phase-out range for IRA deductions.
- Both spouses must claim the standard deduction, or both must itemize their deductions. One spouse cannot claim the standard deduction if the other is itemizing.
- This filing status generally pays the most tax of all the filing statuses.
Since filing a joint return requires the consent of both spouses, it might sometimes make sense to not be included on your spouse’s tax return. Signing a joint tax return makes you both responsible for the accuracy and completeness of the return and obligates you for any current or future tax liability or penalties.
There are specific situations when it can be better to file separately. These include:
- When you need to separate your tax liability from your spouse. If you file separately, you will only be responsible for the accuracy and payment of taxes for your own return.
- In certain situations when there is a large disparity between incomes of the spouses. This may result in a combined lower tax situation, but usually only in separate (non-community) property states. See Married Filing Separately in a Community Property State section below.
If you are not sure, complete your taxes both ways to see which one may be best for you.Married taxpayers and Head of Household filing status
You and your spouse did not live together during the last six months of the year and you maintained a home for your child for more than half the year. In certain situations you can be considered unmarried for tax filing purposes.
This filing status can allow you to claim the earned income credit along with other credits. Additionally, your standard deduction will be higher than if you file as Married Filing Separately. For more information, see Do I Qualify for Head of Household?Married Filing Separately in a Community Property state
When one or both spouses live in a community property state special rules apply for allocating income and deductions between each spouse’s tax return. Community property states are: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.
Each spouse generally reports one-half of the total income on each tax return.
The same goes for deductions – each spouse generally gets half of the deductions. This is often not exact, as for couples with an odd number of children.What if I change my mind?
Married Filing Separately taxpayers can amend their returns and change to Married Filing Jointly within three years of the original due date of the return.
However, Married Filing Jointly have only until the April 15th tax deadline to change their minds and switch to Married Filing Separately.What if my spouse died during the year?
If your spouse died during the year, you are considered married for the whole year for tax filing purposes. File Married Filing Jointly for most situations. If you remarried during the year, you could file a joint return with your new spouse.
If you obtain a court decree of annulment which holds that no valid marriage ever existed, you are considered unmarried even if you filed a joint tax return in an earlier year.
After an annulment, you must file amended returns for any previous years you filed as Married Filing Jointly for all tax years affected by the annulment that are not closed by the statute of limitations (generally 3 years). The amended returns should use either single, or if you qualify, Head of Household status.How to compare filing separately vs. filing jointly
Using TurboTax Online —
- Prepare a joint federal and state return but don't file.
- Then prepare two Married Filing Separately returns (but don't file! - now you should have 3 returns, keep track of the logins!), and
- Compare the results between the Married Filing Jointly and the two Married Filing Separately returns.
- Then complete and file the tax return(s) for the status you prefer or that provides the better result.
You don't have to pay for the tax return(s) you don't file. However you have to enter everything several times; be sure you remember to enter everything in each of the 3 returns! Yes this may be awkward but it could save you money! Remember to keep track of the login(s) you choose to file.
Using TurboTax CD/Desktop software —
(Install from a CD or download TurboTax Basic version or higher, seeTurboTax Download FAQs.) We make this is so easy installed on your desktop:
- Complete a federal MFJ return.
- Click on the Forms icon in the top, right-hand screen and switch from Step-by-Step to Forms Mode (available only on CD/Desktop software versions).
- Click Open Form and in the left column, click on Open Form. Then enter What-If Worksheet (include the hyphen!) in the Type a form name box.
- In the list under US Form 1040 Individual Tax Return, select the What-If Worksheet line, then click Open Form.
The What-If Worksheet appears to the right with the first column showing your MFJ return information.
- Check the MFJ vs. MFS perform comparison box at the top of the form. The MFS results are shown in columns 3 and 4.
Additional comparison options are available with the Copy columns and Add or Subtract column buttons. Create and compare various situations.
- Choose the best MFJ or MFS option for you and your spouse.
- At the bottom left, click Print to save a copy to refer to when making the desired changes in each of your tax returns.
- Click the Step-by-Step icon at the top (where the Forms icon was) to return to tax interview mode and make the desired changes for this return.
However, remember there are reasons that you might want to file Married Filing Separately, even though it does not result in the lowest tax.
For example, you might choose to file separately if you want to be responsible for only your tax return, or if you and your spouse do not agree to file a joint return.Related Information:
I cannot believe that turbo tax cannot generate filing separate returns based on the data entered for a married filing jointly return. Having to use separate logins and key in data that has already been entered is quite labor intensive and rather disappointing. Instead, I will use the information supplied and assume that filing separately will probably not be beneficial.
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