Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.
03-02-2013 02:37 PM
We are trying to determine what the conditions are under which we should file separately or if we're better filing jointly, based on our status below. I'd rather not go re-do taxes for both of us just to compare!
-We were married in 2012.
-I have three children that live with us.
-My wife owns property where she lived for over half of 2012.
-I own rental property.
-We did not buy a house together, we rent our current residence.
-We don't have any additional investment income or capital gains.
-Entering all our deductions, we're about $4,000 below the $11,900 standard deduction.
-My wife filed 2011 taxes singly, she got a refund that year and had similar income in 2012.
-I filed 2011 taxes as head of household, and had to pay about the same amount as she had in refund due to the rental income.
-Our current return (have completed but not filed) is showing a refund.
Given all this, is there some reason we should consider filing separately?
Thanks in advance!
Solved! Go to Solution.
03-02-2013 08:34 PM
As a general rule, Married Filing Separately almost always is a poor way to file, a significant numbrer of credits are not available to those filing separately and the effective tax is almost always higher. There are rare instances when MFS is to the taxpayer advantage. There are also occasional reasons when MFS is ia leaglly necessary, such as pending Divorce or one of the taxpayers owes a debt that the IRS can collect.
Your H&R Block Preparer has a tool built into the software that can take the prepared Joint Return and display in detail the results if the taxpayers filed separately. The tool does not change the original Joint Return and there is no charge for using the tool to make the comparison.
Your Tax Professional can show you the comparison for the current year and for the prior 3 years if the returns were done by H&R Block.