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May 13, 2021
Question

Married filling separately for tax purposes i.e. medical expenses?

  • May 13, 2021
  • 1 reply
  • 0 views

Hello, 

I have just about completed The TurboTax interview.  But I would like to know if there is an easy way now that I have completed our taxes to turn it into married filling separately.  I realize only one of us can itemize if we do that, but I would like to understand if at that point some expenses like medical related expenses would be based on one paycheck then?  What are the primary reasons a married couple files separately?

    1 reply

    Employee
    May 13, 2021

    No there is not an "easy" way to turn a joint return into separate returns.    It takes lots of work.

     

    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.

     

    Or use the WHAT IF tool:

    - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view)

    - Click on the Open Form Icon

    - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form

    - You will see the worksheet on the right side of the screen; enter the information right into the form

    - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

     

     

     

     

    And....you are mistaken about "only one of us can itemize"----because if you file separate returns you each have to file the same way.  So you BOTH itemize or both use standard deduction---not "one of each."   And if one of you uses all or most of the itemized deductions, the other spouse ends up not even getting their standard deduction since that spouse has to itemize even if they do not have anything to enter as a deduction---which makes all of their income taxable.

     

     

    If you were legally married at the end of 2020 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 $24,800 (+$1300 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-separately

     

    **Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**