Wednesday, January 13, 2010

What's the difference between filing married joint return or married seperated?

My wife and I usually recieve a good amount of income tax return because of our wages and our children. If we were to file seperatly would we still get the same amount of money back?What's the difference between filing married joint return or married seperated?
No. Married Filing Sep. is the last choice for filing status, usually only used by couples who are breaking up and can't file jointly. The tax percentages are higher, and certain deductions are limited. Jointly is the only way to file if you have a choice.What's the difference between filing married joint return or married seperated?
Some credits are not available to MFS status which would reduce the returns. You also would have itemization issues since those have to be seperated and if one itemizes, the other can not claim standard deduction. The IRS will ';link'; the returns since you have to put the other spouses social on your return. I know of some very wealthy people who file MFS to keep their money and estates seperate and take the tax hit to maintain this seperation. If someone tells you youcan file single and head of household to get a huge return with EIC, that's fraud and will get you in big trouble (the IRS is onto this scam and are checking).
You would get killed if you filed separately. You would not get your $1,000 per child credit and if one of you earned substantially more than the other the high income spouse would pay tax at a higher rate--much better to let the low income spouse's income dilute the high income spouse's income.

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