2015 Tax filing - married/jointly vs. married/separately

[Newventurer]

2015 will be the first year that I will have no income from work, my DW is continuing to work full time.

I would like to plan for the most tax advantaged strategy for this situation and would like to hear your input on things that I should keep in mind to determine the optimal strategy. I have done some reading regarding the Roth conversions and possible benefit of filing separately when using that strategy. Anything else? How does one divide joint account income (CDs) if filing separately? Thanks

 

[braumeister]

Something to consider is that in many states you must file with the same status as on your federal return. That can make a significant difference in the bottom line, so check if this is the situation in your state, then run test returns both ways for both federal and state.

 

[athena53]

Please let us know how this works out; DH and I were in that position for years (in our case, he had SS and I was working) and filing separately never made sense to us. Even if I allocated just enough of the deductions to him to get his Federal taxes down to zero, my side of the taxes skyrocketed. Our state marginal rate wasn't bad so I figured that wouldn't make up the difference.


Keep in mind that you and DW both have to itemize deductions or neither can itemize. That's because if, for example, you take all the deductions and DW takes the standard deduction, she's getting an "extra" deduction and that's not permitted.


The only time Married Filing Separately worked for me was with my first husband in NJ; the $$ we saved on NJ taxes was worth it. I also filed separately the year we were separated prior to our divorce, knowing he wouldn't file and wanting to keep my own record clean.

 

[gauss]

I used the current year's copy of my favorite tax software to create pro-forma returns for the next year when I stopped working. I certainly did not want any surprises!

-gauss

 

[jebmke]

It is worth checking. It rarely pays off though. I've done hundreds of returns for retirees over the past 5 years and there were only two cases where the tax liability was lower for MFS.