I have just been married a year and I have a 4 month old son. Should my husband and I start to file our taxes jointly or should we continue filing individually. Which way will get us more money?
2007-01-08 02:41:44 · 4 answers · asked by Crash 4 in Business & Finance ➔ Taxes ➔ United States
The real answer to this question is "IT DEPENDS". It depends on how much money both of you made individually. You have two options. Married filing Joint or Married filing Separate. There are no hard and fast answers here, but in general, if you both made ~$25,000 or more as individuals, you could be better off filing married-separate. A notable exception is if either of you were in school this last year, as you would lose the HOPE or LIFETIME learning credits if you file separate. From the sound of things Joint is most likely the best, but you still should look at it both ways first. Consult a pro and look at your situation both ways before you file.
2007-01-08 04:43:44 · answer #1 · answered by hdsok 2 · 0⤊ 0⤋
It is true that if you are married that you can not file single or HOH if you are married. But, lets be realistic, some people do it anyway. If you did it anyway and got caught you would be in BIG trouble.
It isn't worth it because you get very little (if anything) from the chance you are taking. Here are your options (whether legal or not)
MFJ gets a standard deduction of 10,500
In this case, you both get the credits for your son (EIC and child tax credit) as long as your combined income is not more than 38,000 Also, he is a dependent of both of you instead of just 1.
MFS gets the same deduction as SINGLE of 5,150
If you are married filing seperately, you are not allowed to take any credits. If your husband itemizes, you must itemize and vice versa. The IRS does this because they know that MFJ is the best option and if you file MFS, there is a reason (usually debts owed to the IRS)
HOH gets a deduction of 7,500
This sounds good, but only 1 person at a particular address can file HOH. You must have a dependent to file HOH. Also Only one of you get to claim your son. The other person may end up owing the IRS because they have no choice but to file single. If they itemize they may be able to avoid this. Also, you wouldn't be gaining much for the risk you would be taking. If you do the math: (5150+7500=12,650) This is only a 2,150 increase from the deduction that you would get from MFJ. Also, this is not your refund difference, it is just how much tax-free income you get. So it may save you about $40 in the end and you risk problems with the IRS. Not Wise.
2007-01-08 03:12:30 · answer #2 · answered by Smart1 3 · 0⤊ 0⤋
FIle Married Filing Jointly for the best refund. The only other LEGAL choice is Married Filing Separately, and you WILL get a lower refund / tax bill will be higher.
There is no such thing as Married Filing Single.
The WealthBuilder
Tax Specialist
2007-01-08 02:45:11 · answer #3 · answered by WealthBuilder 4 · 2⤊ 0⤋
File Married/Joint.
If you file Married/Separate, you are penalized & you won't get to claim alot of deductions.
2007-01-08 03:06:33 · answer #4 · answered by T H 4 · 0⤊ 0⤋