Should we file jointly or individually?

December 15, 2012 2:49 PM

Mr. Arnicae and I are married, but haven't filed our (U.S.) taxes jointly before. We're trying to figure out how to decide if it would be financially advantageous to file jointly, and what the negatives or positives would be.

Complicating factors:
-I make about 1.5 times what he does
-Our combined pre-tax salary is a bit over 100k, mostly w-2 but he has a fair amount of 1099 and misc income to declare
-We work in two different states
-We have no kids, and this year will have no deductions for elder support
-We rent our apartments

We generally do our taxes on TurboTax, so if the answer is "Go see an accountant", we can do that, but we weren't sure if there was a obvious choice here.

Neither of us feels too strongly about this - all other things being equal, we'd like to do whatever would save us the most time and money.

Thanks!

posted by arnicae to Work & Money (9 answers total)

(VERY) generally speaking, filing jointly is a good idea for someone in the situation you're describing: the brackets shift upwards for those filing jointly, which can keep you in the bracket you want to be in for more of your income. (Income tax brackets are, of course, marginal, so the higher rate only affects the portion of income that pushes you into that bracket, but still.)

Bankrate.com has a pretty decent primer on how some of the numbers break down.
posted by disillusioned at 2:53 PM on December 15, 2012 [1 favorite]

Tax accountant, for sure: they'll know all the ins and outs and can advise you. (And if you're in northern Virginia, I can give you the name of a good one.)
posted by easily confused at 2:54 PM on December 15, 2012

It often makes sense to calculate (or estimate) how much tax you would pay filing jointly and for filing separately, and then choose whichever costs less. Many programs like TurboTax can easily do this comparison for you.

Aside from changing your tax bill, filing jointly has a few other consequences. For example, it might change your IRA contribution limits. Also it means that no one else can claim either of you as a dependent (probably not an issue unless you are students or still live with your parents).
posted by mbrubeck at 2:59 PM on December 15, 2012 [1 favorite]

We use TaxAct and it has a joint vs. separate calculator. Like disillusioned said above, you're probably better off filing jointly; it also doubles your standard deduction, and filing separately disqualifies you for a lot of other credits and deductions you'd get filing jointly.
posted by zsazsa at 3:00 PM on December 15, 2012

Run the numbers both ways in Turbotax, file the way that is best.
posted by zippy at 3:10 PM on December 15, 2012 [5 favorites]

My tax guy says that it's almost never advantageous for a married couple to file singly. I forget the conditions under which they are, but your situation isn't all that different from mine and my wife's, and we file jointly.
posted by adamrice at 4:22 PM on December 15, 2012

I think that joint filing will probably save some taxes.

In the case of a joint file, there may be some extra futzing with deciding who is resident in what state, and which taxes are filed with which state. Ask an accountant.

I think (e)mailing everything to an accountant will save you a lot of time over filing separately. They file, and will send you all the necessary paperwork back, if you have to send a check in. I don't like doing taxes, so it's worth it for me.

Make sure you get an accountant who can manage taxes in both states.
posted by carter at 4:45 PM on December 15, 2012

Young + no special deductions or significant capital gains think about turbotax - or just filling out the paper forms. If you learn to do this early in life you will benefit later in life when things get complicated - then you can either continue to do it yourself, or be reasonably sure the tax guy you hire is doing a good job...

Nthing the thoughts above on the primary question, when we were in a similar situation filing jointly always was better.
posted by NoDef at 6:06 PM on December 15, 2012

When you file separately, you almost always pay more because the break for higher tax brackets occurs at a lower income. Generally, the only times it makes sense is if one of makes significantly less than the other and needs to meet an AGR cut-off to qualify deductions like medical expenses or if one of you pays alimony or if one of you takes questionable tax deductions and the other wants to shield themselves from criminal liability.
posted by Lame_username at 4:07 AM on December 16, 2012