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 Quick 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.
The Quick MFJ vs. MFS Comparison module can be accessed from two places in TaxSlayer Pro.
From the Main Menu of TaxSlayer Pro select:
- Quick MFJ vs. MFS Comparison
From the Main Menu of the MFJ Tax Return (Form 1040) select:
- Miscellaneous Forms
- MFJ vs. MFS Comparison
MFS filers may file an amended MFJ return after the filing deadline has passed (26 U.S.C § 6013(b)), but MFJ filers cannot change to MFS returns once the filing deadline has passed. Both MFJ and MFS filers can, however, file amended returns with a different filing status before the filing deadline.
Note: This is a guide to using the MFJ vs. MFS Comparison module in the TaxSlayer Pro program. This is not intended as tax advice.