Tax - Married, living seperately?

Question

Whats the best way to file tax returns for the following scenario -
married but living seperately because of the job. I live in WA state, with no state tax however my spouse lives in another state which does have state tax. I pay mortgage however my spouse rents. My spouse had to move because of the job. I think we can get some benefit of that.

Answer 1

There are choices to be made here.

You can file Married Filing Jointly, of course, and it generally gives the lowest tax.
You can file Married Filing Separately, and it generally gives the highest total tax (but never lower than MFJ).
But, if you meet certain criteria, one or both of you may be Head of Household. Here's the rules:
You can be CONSIDERED unmarried (even if you are married) if you lived APART from your spouse for the entire last 6 months of the year AND you have a qualifying child living in YOUR home. With this definition, it's possible that one or both spouses may be Head of Household. If only one qualifies as Head of Household, the only logical choice for the other spouse becomes Married Filing Separately.

You mentioned you live in WA, but you did not mention what state your spouse lives in. Depending on the other state, certain rules for filing that return will apply.

Our tax practice handles these types of cases regularly, as almost half of our clients live outside our home state, including clients living overseas.

The WealthBuilder
Enrolled Agent / Tax Specialist

Answer 2

Some states require that if you file your federal return joint, you must also file your state joint. If the state where he lives requires this, then you should probably see an accountant (and I'm not talking about H&R Block or Jackson Hewitt) since it could get pretty complicated.

If the state where he lives doesn't require that, then he should file separately in the state where he is now, you don't have to file state since you don't have income tax there in WA. File your federal return however gives you the lowest taxes, probably joint.

Answer 3

File your federal return as married filing jointly. You do not have to be living together to do this. Because your wife moved to a new job, you can take an adjustment to income for moving expenses, using Form 3903.

Depending on the state of residence for your wife, she may be allowed to file a joint return with you or not. She should figure both ways if allowed and do what is best.

Answer 4

Living seperately is not a factor in preparing your tax return, it is whether you are filing jointly or seperately. You should prepare the returns, state and federal, both ways. Whichever way leads to a lower total tax burden is the way to file. If you go to a paid preparer that has software for all of the states (not just the one you are in) then they should be able to do this for you automatically.

Answer 5

find a real tax preparer. some of the big namers hire people for the season who aren't adequately trained. my mom owns her own accounting/tax preparation company and she gets so many "re-do's" from new clients who have in years past had their taxes done by the big namers. just make sure it is someone who has been doing it for quite some time.