Question

Should I file married but filing separately given my wife’s unusually higher income in 2022?

Forum|Forum|3 years ago
January 22, 2023
1 reply
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There appears to be a significant tax bill by filing jointly. This is not the case filing separately.

TurboTax Live Deluxe Online

note that if one itemizes both must or if one uses the standard deduction both must use it. if there's a disparity in income then MFS is usually worse. we can't see your calculations or returns but for example, if one has $70K in taxable income and the other has $20K then MFS is about $13K total in taxes while joint is only about $11K. MFS usually only makes sense if incomes are about equal or the one with the lower income has high medical expenses. MFS and you lose certain credits and deductions but perhaps these don't apply in your situation. also, note your filing status is married filing separately not single or head of household. if you live in a community property state, then the rules about reporting separate incomes can be complicated. You should always consult a tax professional in that case.

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Employee

If you were legally married at the end of 2022 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 $25,900 (+$1400 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

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.

**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.**