The best way to file income taxes for 2006 (marriage, child birth)?

Question

In the 2006 calendar year I got married and had a baby. I'm trying to detemine the best way to file my taxes in order to maximize my refund. Should my husband and I file jointly or seperately? Also, are there any additional deductions for medical expenses related to the pre and post-natal care of myself and our daughter? I want to have a CPA do our taxes this year, but my husband thinks it would be a waste of money. Would going directly to a CPA be worth the cost or would filing through a program like Turbo Tax with a minimal fee be just as effective?

Answer 1

Your best filing status would be Married Filing Jointly. If you itemize you can include the medical expenses. If you do not own a home and have mortgage interest to deduct is is likely that the $10,300 standard deduction would be more advantageous. As for a CPA, you will find that to be an expensive way to go. Turbo Tax will work if you are fairly good with computer programs. Do not get the basic program. The Professional at about $80 is a much better buy. Depending on the state you live in there are other professional tax services that can do you return much cheaper than a CPA.

Answer 2

As far as the medical expenses, you can only deduct unreimbursed medical expenses that exceeded 7.5% of your income, so unless you had huge expenses or very low income, you probably can't deduct them. Even then, if your itemized expenses are less that the standard deduction for a married couple of $10,300, you would just take the standard and not itemize - you get one or the other, not both. Unless you own a house and have mortgage interest and real estate taxes, you'd probably have a hard time coming up with that many deductions. And yes, filing joint is almost always the better way to go.

I wouldn't spend the money on a CPA - your return is probably fairly simple unless you have other things you didn't mention, like rental property. Something like turbotax shouild work well for you. Another option, if your income is below $40,000 or so: look for a VITA site in your area. You can find info about VITA at irs.gov. There trained volunteers will do your tax return at no charge. Most sites can file electronically.

Answer 3

Not enough to know to have a CPA do a non-business owners tax return. File jointly unless have special reason not mentioned not to. All medical expenses above 7.5% of the total on page 1 of 1040 can be put on Schedule A. If don't have enough other deductions will just get the standard deduction so no benefit. No complexity to deal with here. CPA worst source of financial advice imaginable despite mention above. $100,000 income does not make return more complicated.

Answer 4

Marriage filing jointly usually produces the best outcome, but that depends on you and all the deductions and credits you qualify for. CPA's are expensive and usually busy with bigger more complicated returns; that is why they charge a lot for simple returns. Turbo Tax would probably be great. It is simple, transfers it to the IRS online, and can get uploads/upgrades every year to match the new laws. Yes, all your medical expenses from the birth are deductible as your ITemized Deductions. However, it has to be more than 10% of your Adjusted gross income. Even then, it gets phased out....horrible law. Good Luck.

Answer 5

Dont listen to Roro. But the others have good advice. TurboTax is good if you have only two W-2's, mortgage and some medical deductions. You dont need to pay a CPA (I work for a CPA firm so I know). Once you make over $100,000, then you should get a CPA for general financial advice as well as tax return preparation.

Answer 6

roro is right except for one small thing - to be deductible on itemized deductions, your medical expenses have to be greater than 7.5% if your adjusted gross income, not 10%. Also, your total itemized deductions would need to be greater than the standard deduction in order for you to benefit by itemizing. You can find out by using turbo tax and choosing which is best for you. I agree with roro tat a CPA is not necessary for your case

Answer 7

I paid $150 to have my taxes done last year, having been in a similar situation. I ended up with THOUSANDS back in a return because the accountant knew what he was doing. Medical expenses can be deducted, as can child care, some transportation, etc.... I highly recommend you pay to have them done by a trusted professional. I'm so glad I did.