If you are filing a return for a married couple, you have two options for the Federal filing status: Married Filing Jointly or Married Filing Separately. There are several reasons why a couple may wish to file separately:
- Filing separately may result in an overall lower tax burden;
- One spouse doesn't want to be responsible for the other spouse’s tax obligations;
- To avoid one spouse's refund being offset against the other spouse's past due debts incurred prior to their marriage. (In this case, filing a joint return along with Form 8379, Injured Spouse Allocation, is a typical option.)
With respect to the tax burden, it's usually more advantageous for a married couple to file jointly. However, if the two spouses' income levels are comparable, or if one spouse has low income and high medical expenses or high casualty losses, filing separately may be more advantageous. On the other hand, tax rates are generally higher for separate filers, credits such as the child and dependent care credit, earned income credit, and education credits are not available, and other credits are reduced to half the amount on a joint return. Additionally, if one spouse itemizes deductions, the other spouse must also itemize deductions.
In TaxSlayer Pro, the MFJ vs MFS Comparison module takes into account all these factors, showing how the two filing options compare for your clients. After entering all the income, adjustments, and credits for the primary taxpayer and the spouse, the module will indicate either the amount due or the refund on the joint return as well as on each separate return.
To create and edit the MFJ vs MFS Comparison within the MFJ individual federal tax return (Form 1040), from the Main Menu of the return select:
- Miscellaneous Forms
- MFJ vs. MFS Comparison - If you're told the comparison already contains information and asked about pulling in data, answer Yes to refresh the comparison with the return as it is now, or answer No to not refresh the comparison data. Any line that is not starred can be selected and edited as needed, indicating the taxpayer's portion of the joint amount.
Note that the program window only shows the joint and taxpayer columns. To see the entire worksheet including the spouse column, click the View button at the top of the window.
Filing Status Caveats
- Both MFJ and MFS filers can file amended or superseding returns changing to a different filing status before the filing deadline.
- MFS filers may file an amended MFJ return after the filing deadline has passed (26 U.S.C § 6013(b)).
- MFJ filers cannot amend filing MFS returns once the filing deadline has passed.
Note: This is a guide to using the MFJ vs. MFS Comparison module in the individual tax return in the TaxSlayer Pro program. This is not intended as tax advice.