My husband makes $60,000 a year, and I make $38,000 (full-time job) plus $7000 (part-time job). We wonder:
1. Should we file joint or separate income tax? Which one saves more money and how to calculate it? Also, do we have to decide now or can we wait until we file the tax return in April?
2. We both have medical benefit from our jobs. Is it more economical to get medical from one person than get medical from his/her own company? Or it doesn't make any differences?
Thank you.
2006-09-25 11:52:03 · 7 answers · asked by shopaholic 5 in Business & Finance ➔ Taxes ➔ United States
Short Answer: File jointly.
The IRS rule is that if you are married on Dec 31, 2005 you cannot file for single status. The only exception is if the spouses were living separately in the last 6 months.
In all my experience, I have never seen anyone benefit from filing separate. There are so many credits and deductions that are not available (or phased out sooner) for Married filing separate.
There is no tax differentiation whether you are on the same or different medical coverage. Compare the three scenario and pick the plan that suits you the best or the most reasonable cost.
You on your plan, your husband on his
You and your husband on your plan
You and your husband on his plan
2006-09-25 11:54:26 · answer #1 · answered by JQT 6 · 1⤊ 0⤋
Married Filing Separately (MFS) is normally a very bad way to go. There are rare cases when the income is greatly different that MFS is advantageous. The most common reason is if one spouse owes money or has a tax liability to which the IRS would allocate any refund. For sure it is worth your while to have a tax professional advise you on this point as there are more issues than can be discussed in this format.
The insurance issue will depend on the insurance plans that you and your husband have. I would suggest that you discuss this issue with the HR person where you both work.
2006-09-25 12:02:48 · answer #2 · answered by ? 6 · 0⤊ 0⤋
Unless there are reasons that you do not want to be liable for any of your husbands taxes, it is usually best to file a joint tax return. Filing separately usually limits your benefits. However, you should take the time to run the numbers to see which works out best for you. You can make that decision once you file your tax return.
For the medical insurance, as long as you don't have kids, it is probably better for you and your husband to have separate insurance unless one plan is much better than the other. Usually, the premiums for single coverage is far cheaper than family coverage. However, if you have kids, then just go on one plan because it doesn't make any sense to pay for family coverage on one plan and single coverage on another.
2006-09-25 12:59:13 · answer #3 · answered by Steve 6 · 1⤊ 0⤋
Under most circumstances, you'll pay less tax if you file joint than married filing separately. If you buy a program like turbotax, you can figure it both ways to be sure - or get three sets of forms and do it manually.
If you have a substantial monthly payment each place to have the dual medical coverage, you might consider just having one.
2006-09-25 12:00:05 · answer #4 · answered by Judy 7 · 1⤊ 0⤋
With THAT kind of money, ask someone whose opinion costs something - as in a CPA or a financial consultant... THAT way, you can trust the answer... FYI, my wife & I save MUCH more filing jointly and we have 3 kids...
2006-09-25 11:56:13 · answer #5 · answered by KnowhereMan 6 · 0⤊ 0⤋
In a nutshell, if one better half earns severely better than the different, mutually often works superb. in any different case, it makes little distinction no count in case you document one after the other or mutually (in my opinion). The "marriage penalty" is mostly a element of the previous. you may run the numbers the two training on a thank you to be attentive to for effective which saves extra funds.
2016-10-17 23:24:47 · answer #6 · answered by comesana 4 · 0⤊ 0⤋
Actually per my tax advisor in the state of GA. Once you are married you are to file jointly. If you marry in middle of the year you can file seperately one last time.
I know many still file seperately while married but some of those people actually get busted.
My tax advisor also stated in 2007 the IRS will have new programs in force to cut back on this filing seperately while married. It may take a year or 2 to work properly but they will be checking addresses and so on.
I would watch out in the future.\
(jointly will actually save money)
2006-09-25 11:55:11 · answer #7 · answered by Keith Perry 6 · 0⤊ 6⤋