The reason for filing seperately is: our incomes together is too much ($150,000) to qualify for the $25,000 real estate losses, and student loan interest of $8000. If we file seperate returns will would qualify for the tax breaks noted above.
thanks,
thomas
2007-02-27 19:03:34 · 8 answers · asked by crestviewk 1 in Business & Finance ➔ Taxes ➔ United States
Wow, this is a complicated subject! I can't explain every nuance without knowing your income and other details but I'll give you as much info as I can. A good tax preparer with all of your info should be able to give you more personalized facts and figures.
You can file married filing separately but, unfortunately, MFS is not going to be good for you. First, you cannot deduct any student loan interest using that filing status. Additionally, since you lived with your wife, you would not be able to deduct any of your real estate losses. If you lived apart from your wife all year there are other rules.
Now let's talk about filing MFJ. Since your combined income is over $150k, you cannot use your rental losses to offset your income at all; however, you do not just lose that loss. You can carry it forward to next year and if next year you still make too much money you can carry it forward to the following year, and so on and so until such time as your income is low enough to start using the loss to offset your income. Every year that you have a loss but cannot take it because your income is over 150k, you simply add it to the previous year's unallowed loss and continue to carry everything forward. You can continue in this fashion for 20 years. Eventually, the loss will be deductible unless you keep earning a very high income. There is also such a thing as a carryback, where you apply your losses to previous years and get a refund. But if you've been earning a high income for some time, this probably won't help you. See the reference below for details on carrying back.
As mentioned above a good tax preparer can give your more personalized details, and he or she should be able to keep track of all of this and give you good written records.
Whew! I hope this helps.
2007-02-28 04:44:43 · answer #1 · answered by Lilly 3 · 0⤊ 0⤋
I am a Tax Preparer, but you have totally lost me. First, let's address the filing issue. If you are married and living together, the law requires that you either file Married Filing Jointly or Married Filing Separately, (which the IRS seems to hate). If you file separately, you both lose all benefits and credits, plus your return cannot be filed electronically. It must be mailed in, and if one of you itemizes deductions, you both must, even though the Standard Deduction may be more advantageous to one of you. You must reference each others name and Social Security numbers on both returns. Now, regarding real estate losses, I know of no way you can deduct real estate losses unless it was within a business entity in which case how you file is of no consequence since the business will have it's own income and expenses. I am not aware of any limitations on claiming student loan interest either, but I admit I'm guided at work by the computer program which I don't have at home. Maybe some other tax preparer will answer your question and know of the limitations you mentioned. Good luck.
2007-02-27 19:36:27 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You can file separate returns. However if you do you will face much higher taxes in most cases.
The best way to determine which way will work out best for you is to prepare your returns both ways. Then file whatever way works out best for you.
I'm curious about your real estate losses. What type of loss are you talking about? If it's the loss on the sale of a residence, you can't deduct any of that anyway so filing separate won't help you at all with that.
Frequently when you file separate returns, certain deductions and credits are severely limited. Figuring your taxes both ways is the only realistic way to find out what's best for you.
2007-02-27 22:41:35 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
I don't see the advantages for filing separately since both income are combined to qualified for real estate. Also, the marriage tax penalty had been increased for a married couple. Who real estate losses is it? if both are involved then you both can deducted under
real estate losses and the student loan only applied to whoever
the interested was paid. By filing separately, your itemized must be file separely, so to answer your questions above, its more likely that you might gain in some areas but loss to some other areas. And its cost you more to file separately too.
2007-02-27 22:07:03 · answer #4 · answered by MINH H 3 · 0⤊ 2⤋
98% of the time, you lose more than you gain by filing Married Filing Separately. There are a lot of deductions/credit you lose. But the only way to know is to try it both ways. Most software, all it takes is a click of the button to try it both ways.
2007-02-28 00:20:36 · answer #5 · answered by LC 2 · 0⤊ 0⤋
To answer your question, yes you can file married filing separate. It has nothing to do with your living situation. "Separate" refers to separate tax returns.
2007-02-27 20:45:37 · answer #6 · answered by tma 6 · 1⤊ 0⤋
What does the county could desire to do with toddler help? The STATE could desire to be harassing him approximately it. what form of guy would not opt for to help the mummy of his little ones guard his little ones? How obscene, i'm so sorry.
2016-10-02 02:39:43 · answer #7 · answered by ? 4 · 0⤊ 0⤋
i think thats against the law
2007-02-27 19:10:55 · answer #8 · answered by GQsmooth 3 · 0⤊ 3⤋