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Started By
Message
Got married last year: should I file our taxes separately or jointly?
Posted on 2/3/21 at 7:41 am
Posted on 2/3/21 at 7:41 am
Forgot to update my tax paperwork last year and I've been paying in as "single and 0" for 2020. Would it be better to file separately from my wife? I'm almost done filing everything through Turbo Tax (jointly) and I'm getting no where near what I usually do.
should i start over and do it separately?
should i start over and do it separately?
11
Posted on 2/3/21 at 7:46 am to finchmeister08
You'll probably be better off filing jointly.
Posted on 2/3/21 at 7:48 am to finchmeister08
who's the lucky guy?
Posted on 2/3/21 at 7:50 am to finchmeister08
Your wife likely is not withholding correctly
Posted on 2/3/21 at 7:57 am to finchmeister08
There are very few scenarios where you come out ahead filing separately.
It’s possible she didn’t withhold enough or maybe your income outside of work was higher this year.
Unless you just want to keep your assets separate from hers, you should probably file jointly.
Income from $40-$80k is taxed at 22% if you file separately, only 12% if you file jointly.
It’s possible she didn’t withhold enough or maybe your income outside of work was higher this year.
Unless you just want to keep your assets separate from hers, you should probably file jointly.
Income from $40-$80k is taxed at 22% if you file separately, only 12% if you file jointly.
This post was edited on 2/3/21 at 7:59 am
Posted on 2/3/21 at 7:59 am to TomRollTideRitter
quote:
There are very few scenarios where you come out ahead filing separately.
when i finished my portion of the taxes, we were getting a few thousand $$$s. when i started putting her info in, it went to a few hundred $$$s. and it was a pretty dramatic noe dive.
This post was edited on 2/3/21 at 8:01 am
Posted on 2/3/21 at 8:03 am to finchmeister08
MFJ is the proper call in 99% of the scenarios.
If you file separately, and she owes and you get a refund- it will wash out anyway for your combined finances. Use MFJ and take advantage of the lower rates.
Or run them both ways in Turbo Tax and see what happens.
If you file separately, and she owes and you get a refund- it will wash out anyway for your combined finances. Use MFJ and take advantage of the lower rates.
Or run them both ways in Turbo Tax and see what happens.
Posted on 2/3/21 at 8:19 am to finchmeister08
My first few years of marriage I would do taxes both separately and jointly and it seemed that jointly was never worse and sometimes did end up with a larger refund than filing separately.
So I recommend filing jointly but it doesn't hurt to verify both ways if you are using TurboTax or other electronic prep software.
So I recommend filing jointly but it doesn't hurt to verify both ways if you are using TurboTax or other electronic prep software.
This post was edited on 2/3/21 at 8:21 am
Posted on 2/3/21 at 8:23 am to finchmeister08
quote:
when i finished my portion of the taxes, we were getting a few thousand $$$s. when i started putting her info in, it went to a few hundred $$$s. and it was a pretty dramatic noe dive
Upperdecker is right, this happened to us years ago and my wife wasn't having enough withheld from her pay.
Posted on 2/3/21 at 8:32 am to finchmeister08
Depending on your income level, I would list both of you as "single" on your withholding.
We had a nice $5,000 bill for IRS because "Married" withholding but our income was too high.
We had a nice $5,000 bill for IRS because "Married" withholding but our income was too high.
Posted on 2/3/21 at 8:35 am to Upperdecker
quote:
Your wife likely is not withholding correctly
My wife changed jobs in May 2016. When I started filing taxes in March 2017, I realized she had only had $72 of Fed income tax withheld. I filled out her W-4 so I knew it was correct; the woman who does payroll at her office just never set it up in their payroll software.
Posted on 2/3/21 at 8:53 am to finchmeister08
Everything everybody else said but it can’t hurt to check. You lose several tax advantages when filing Married Filing Separate so it usually only works out in your favor if there is a large difference in the two incomes.
I’m assuming you know that filing Single isn’t an option but I’ll go ahead and say it just in case.
I’m assuming you know that filing Single isn’t an option but I’ll go ahead and say it just in case.
Posted on 2/3/21 at 9:01 am to Larry Gooseman
quote:
Depending on your income level, I would list both of you as "single" on your withholding.
so, withhold on the W-4 as "single or married filing separately" and when are W2s come at the beginning of the year, file jointly?
Posted on 2/3/21 at 9:04 am to finchmeister08
quote:
when i finished my portion of the taxes, we were getting a few thousand $$$s. when i started putting her info in, it went to a few hundred $$$s. and it was a pretty dramatic noe dive.
Yeah same thing happens to me. I’ve never adjusted it, because when I put her info in, it brings it back to where we’re usually within a couple hundred dollars... I guess it doesn’t really matter in the grand scheme of things if you’re of the “what’s mine is ours, and what’s yours is ours” belief. I’d imagine it would start getting dicey if you believe your money is yours and her’s is her’s though.
Posted on 2/3/21 at 9:11 am to finchmeister08
The only scenarios I remember it really mattering is with the floors. For example, if you were trying to hit the 3% floor for medical costs, it may benefit to file separate. Otherwise it really doesn't matter.
Posted on 2/3/21 at 9:29 am to ODP
quote:
The only scenarios I remember it really mattering is with the floors. For example, if you were trying to hit the 3% floor for medical costs, it may benefit to file separate. Otherwise it really doesn't matter.
The other time it can be beneficial to file separately is if one or both of you are on an income-based repayment plan for student loans.
Filing separately can keep your payments much lower than filing jointly.
HR Block software is nice because it allows a comparison between the two scenarios. First, you create a joint file. Once you're done, it will bring up a (quite clunky) spreadsheet that allows a rough comparison.
I'm not sure if other software packages are better or worse in this regard.
Posted on 2/3/21 at 9:34 am to seawolf06
quote:
The other time it can be beneficial to file separately is if one or both of you are on an income-based repayment plan for student loans.
And you have to be on the legacy IBR repayment plan because if you are not they will count the spouse's income vs. not counting it with the older plans.
Posted on 2/3/21 at 9:52 am to Upperdecker
CPA here (not a Tax CPA, so I cannot answer the question directly) - but have some perspective. I would not consider it a bad thing if you owe more after filing taxes or do not receive a big refund.
Think of your potential refund as an interest free loan to the government. As long as you know and can plan on paying taxes when April comes around, you would rather have your money throughout the year to spend/earn interest on as opposed to letting the government have it interest-free.
Think of your potential refund as an interest free loan to the government. As long as you know and can plan on paying taxes when April comes around, you would rather have your money throughout the year to spend/earn interest on as opposed to letting the government have it interest-free.
Posted on 2/3/21 at 10:06 am to finchmeister08
quote:
almost done filing everything through Turbo Tax (jointly)
Haven't used in in years, so don't know where to look, but TT has a feature that you can compare the 2 outcomes and file accordingly.
In your scenario, where when you put your info in you were getting a few grand back, then you added your wife's you were only getting a few hundred most likely would not change if you filed separately. The difference is, while you may get a few thousand back, she would then owe a few thousand. Also, you would lose the standard deduction claim for your wife, which would reduce the # anyway.
Posted on 2/3/21 at 10:20 am to Weekend Warrior79
quote:
Also, you would lose the standard deduction claim for your wife, which would reduce the # anyway.
Yes, when filing separately you either need to both itemize or both use standard deduction. This used to be a bigger deal breaker, but since they doubled the standard deduction in 2017, far fewer people benefit from itemizing either way.
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