All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎03-14-2016
Accepted Solution

Creating and comparing different tax scenarios

Greetings,

 

Can anyone tell me if there is a way that I can create and compare different filing scenarios?  For example, I created one return for Married Filing Jointly and would like to now create one return for Married Filing Separately and then compare the two returns.  I believe older versions of the tax software included this capability.  Thank you all in advance for any help on this topic.

 

Sincerely,

 

mr_polo16

Tax Pro
Posts: 6,137
Registered: ‎02-23-2016

Re: Creating and comparing different tax scenarios

Hi mr_polo16,

 

The only way I can think of to compare filing scenarios is to complete a second return with the spouse who was not the primary taxpayer on the one you already created as the taxpayer (just don't file it unless you decide to file separately).  Why are you looking at filing seperately?  I ask because if for instance you or your spouse has a past debt, there is a way to protect the other spouse's part of the refund from being seized to pay for it.  MFS has many disadvantages, such as the inability to claim most credits and deductions, social security being 85% taxable automatically, if one spouse itemizes deductions the other must also itemize even if they have $0 in deductible items, and there are still more disadvantages.  Most people who file separately do so either when there is no alternative, such as when the spouses live apart and never see each other, or when no credits or deductions are involved and both spouses incomes are high enough that filing separately would put them each in a lower bracket.

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Associate (Council Member)
Posts: 1,925
Registered: ‎12-13-2013

Re: Creating and comparing different tax scenarios

As an additional note, you might find the free Tax Calculator located on the H&R Block website useful in figuring which benefits you the most on the federal tax return. It is a very user-friendly tool and has proven (to me) to be an accurate estimator. For your convenience, here is a link to the tax calculator:

http://www.hrblock.com/get-answers/tax-calculators.html#/en/te/aboutYou

I hope this helps. Good luck.
WillMc1
Tax Professional (Retired)
Pioneer
Posts: 1
Registered: ‎12-20-2017

Re: Creating and comparing different tax scenarios

That works fine.

Thanks

Trusted Pioneer
Posts: 9
Registered: ‎04-09-2015

Re: Creating and comparing different tax scenarios

Actually, there's one scenario in which Married filing Separately is the cheapest way to go. That's when one spouse has a high student loan debt on an Income-Based repayment plan, and the other spouse has a high income but no student loan debt. If you file jointly, the student loan IBR plan calculates both incomes for the payment installment, and the hike in monthly bills can far outweigh the loss of end-of-year tax deductions.

 

Sometimes it's useful to be able to play out both scenarios!