Tax question.

[fake_usa]

I got married in July, and I'm wondering if My wife and I should file jointly or separately? Both of us will be only taking the standard deductions? Will it make any difference in our returns?

Any recommendations?

Thanks,

[tagrims]

Re: Tax question.

It depends....

Biggest thing to watch for is your tax bracket.

I am in the same situation, married in the past year and I found it is better for us financially to file seperately. IF we filed jointly our income would push us both into the next bracket. Whereas filing seperatly only I am in a high tax bracket while my wife still benefits from being in the lower bracket. In my situation, filing seperatly will save us around $900.


I suggest using TurboTax or TaxAct and prepare two sets of returns (1 jointly vs. 2 seperate) and comparing to see which one is more advantageous.

[poundwise]

Re: Tax question.


For most, joint filing typically works out best. Especially when there are not specific additional deductions for one party, such as medical expenses.

You may want to check out these articles:

Fool.com: Married, Filing Separate

Married Filing Jointly vs. Married Filing Separately

[fake_usa]

Re: Tax question.

Thanks for the help.

I also found a pretty good chart where you can compare the different tax brackets.

http://www.moneychimp.com/features/tax_brackets.htm

[scfr]

Re: Tax question.

Run the numbers both ways --- Fill out 1 joint return, and 2 seperate returns, then decide which way you want to file (using whichever results in lower total taxes). Usually filing jointly is cheaper. If you go with filing jointly for 2006, just keep filing jointly unless there are dramatic changes (either to your situation or to the tax laws).

[MonkeyMama]

Re: Tax question.

Are you in a community property state? If so, you have to split all your income in 1/2 anyway. You don't know what a PITA it is when I get clients in here wanting to file separate - Oh my god!!! Of course we tell them how much work it will take and how much it will cost. No one chooses to go that route then - phew.

If you are not in a community property state - run the #s both ways - most tax software will let you compare pretty easily.

But a heads up - generally not worth getting into if you are in a community property state.

[project15]

Re: Tax question.

I got married this year as well and it's going to work out better if we file jointly. I only worked half this year (still at school prior to that) and we won't be in the higher tax bracket.