Married filing joint or separately?


T

Techhead

I can't seem to figure out what benefits me more to file either
jointly or separately. Me and my spouse do not have any dependants.
Nethier of us has student loan interest or any outstanding tax liens.
We don't qualify for any EIC or homestead credits. My wife makes
almost twice what I make but she has to pay about 28% of her income to
her ex as alimony. I only itemize my mortgage interest, re taxes,
state income taxes, and donations.

Is there a formula I can follow that can determine what file status I
should choose? Are there any general "rule of thumbs" to go by?

Thanks,
Brian
 
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P

Phil Marti

Techhead said:
I can't seem to figure out what benefits me more to file either
jointly or separately. Me and my spouse do not have any dependants.
Nethier of us has student loan interest or any outstanding tax liens.
We don't qualify for any EIC or homestead credits. My wife makes
almost twice what I make but she has to pay about 28% of her income to
her ex as alimony. I only itemize my mortgage interest, re taxes,
state income taxes, and donations.

Is there a formula I can follow that can determine what file status I
should choose? Are there any general "rule of thumbs" to go by?
No. You have to figure it both ways, and don't forget the state, if your
state requires you to use the same filing status as on your Federal. A
couple of notes about items you mentioned:

Alimony is an adjustment to income, which means it's deductible whether you
itemize deductions or not. As for deductions, if you file separately, both
of you must use the same deduction method, itemized or standard.
 
T

Techhead

No.  You have to figure it both ways, and don't forget the state, if your
state requires you to use the same filing status as on your Federal.  A
couple of notes about items you mentioned:

Alimony is an adjustment to income, which means it's deductible whether you
itemize deductions or not.  As for deductions, if you file separately, both
of you must use the same deduction method, itemized or standard.

--
Phil Marti
Clarksburg, MD

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As far as state, we live in WI which is a community property state.
Yes, in WI we have to file the same as we do for federal. I know about
both of us having to either itemize or take the standard. Since we are
in a community property state, do we split the itemizations between
both of us if we file separately?

I was filling out a W4 worksheet and if I file married jointly, my
wife who pays the alimony, can claim 11 exceptions federal and I
should claim 3. Now if we file separately, she is suppose to claim 0
exceptions and I still claim 3. Doesn't make any sense to me.
 
D

D. Stussy

Techhead said:
I can't seem to figure out what benefits me more to file either
jointly or separately. Me and my spouse do not have any dependants.
Nethier of us has student loan interest or any outstanding tax liens.
We don't qualify for any EIC or homestead credits. My wife makes
almost twice what I make but she has to pay about 28% of her income to
her ex as alimony. I only itemize my mortgage interest, re taxes,
state income taxes, and donations.

Is there a formula I can follow that can determine what file status I
should choose? Are there any general "rule of thumbs" to go by?
Compute your returns both ways and file the set that results with the lower
combined tax.
 
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Phil Marti

Techhead said:
As far as state, we live in WI which is a community property state.
Yes, in WI we have to file the same as we do for federal. I know about
both of us having to either itemize or take the standard. Since we are
in a community property state, do we split the itemizations between
both of us if we file separately?
I've never had to deal with community property in detail, so I won't venture
a guess. I know IRS has a publication devoted to community property issues.
I was filling out a W4 worksheet and if I file married jointly, my
wife who pays the alimony, can claim 11 exceptions federal and I
should claim 3. Now if we file separately, she is suppose to claim 0
exceptions and I still claim 3. Doesn't make any sense to me.
While W-4 allowances are a totally separate question, I don't see how you
could be doing the worksheets accurately with unanswered questions about
community property and separate filing. I suggest you bone up on that, then
take another shot at the W-4.

It might also help you to go ahead and finish your 2007 returns first. I
have a feeling that joint filing will be better. Even in non-community
states separate often makes more sense only when one spouse has significant
deductions (medical & miscellaneous) that have AGI-based exclusions.
 

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