Question

If I start filling out a joint tax return with my spouse, will Turbotax detect if it made more sense for us to file separately and suggest that?

Forum|Forum|5 years ago
April 7, 2021
2 replies
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Me and my wife got married last year and are uncertain if we should file jointly or separately. If we start filling out our info in turbotax as if we are filing jointly, will turbotax detect if it would actually be better for us to file separately and notify us of that? I know it has those kinds of features for example for detecting if it makes sense for you to itemize or take the standard deduction.

TurboTax Premier Online

J

JohnW152

Yes, it will.

When you use TurboTax to prepare your tax return, the program will perform the calculation for you, and recommend the filing status that gives you the biggest tax savings.

The majority of the time, filing jointly will produce a bigger refund, or lower your tax due, as opposed to the separate filing status.

Please see the TurboTax article Is it better for a married couple to file jointly or separately? for more information.

S

siggioaAuthor

Are you sure that it will? I have just completed the federal part of the application and it is currently showing that we owe more in taxes than what we would if we filed separately (which I estimated by entering our information individually using the TaxCaster calculator from that article), and turbotax has not yet indicated that we should switch to filing separately. Would that happen at a later stage, i.e. after we would fill out the state portion?

JohnB5677

Please be careful with your analysis. Did you file as Married Filling Separate, or did you file with both of you as Single.

TurboTax will not make a determination on the advantage of filing Jointly, or Separately. This is an option, and just as you did, you must evaluate based on the actual calculation.

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N

NCPERSON1

just to set your expectations, 96% of married couples file joint; the tax laws motivate that. Most of the remaining 4% are couples that don't get a long or find a very unique financial situation where it makes sense.

The farther apart your two salaries are the more joint makes economic sense: here is the simple example

She makes $50,000. He makes $10,000.

if they file separate, they each get a $12,400 standard deduction. Therefore Her AGI is $37,600 and His is zero, so taxes are paid on $37,600. Tax will be $4314.

If they file joint, there is a $24,800 standard deduction. Therefore the combined AGI is $35,200. tax will be $3829

that is the power of filing joint

There is one fluke this year: if your combined income exceeds $150,000 and you have unemployment income, you may be better off filing separate to take advantage of the $10,200 unemployment benefit. Quick example: couple earned $160,000 so is not eligible for the $10,200 benefit, but if they file separate and one makes no more than $150,000 it could actually reduce your taxes because you become eligible for the exclusion