SHOULD WE FILE JOINTLY OR SEPARATELY?
Relationships can be taxing. Being married is not easy. Well, OK, maybe being married is easy for you – but at any rate, making tax decisions when you are married may not be so easy. What to do? Working with a tax professional can help you decide the best way to file; there is more to it than just tax rates and the standard deduction…
Here are some highlights…
You cannot file a joint return if one of you is still being claimed as a dependent on someone else’s tax return. (Married students, beware!)
- Both spouses are responsible for the tax that is due from their joint return, regardless of how much or little each taxpayer put into the joint pot. (A problem if divorce enters the equation – we’re not talking about you, of course.)
- If one spouse is earning much less than the other one, Medicare premiums can increase substantially for a couple filing jointly versus filing separately.
What kind of issues should we be aware of if we’re filing separately rather than jointly?
- If you itemize deductions, your spouse must also itemize, even if their total deductions are less than the standard deduction.
- Do you own managed rental real estate together? You should know that the $25,000 ‘passive loss exception’ for that real estate may be totally or partially lost.
- Paying off school? The deduction for interest on qualified education loans is not available to you if you are married filing separately.
For help with these and other tax issues, visit: www.millertaxlaw.com a Litchfield County, Connecticut tax attorney, admitted to practice in CT, NY, and before the US Tax Court. We accept state tax problems for CT, MA and NY, and we accept U.S. federal tax problems from any location in the world.