I’ve done my taxes as married filing jointly, and I was going to try them out with me and my wife seprately (obviously I haven’t filed them yet). So, as for anything I have with BOTH out names on it (ie mortgage) can I just put it on either of our taxes? What I wanted to do (assuming it’s legal) is to put the mortgage, child and anything else I can onto her taxes since she made less then me and see if that drops her into a low enough bracket that we’ll get more back doing that even if it means losing any credits for filing together. Any thoughts?
Depends on what State you live in. But usually, everything has to be split 50/50, except some things which are clearly one or the others, and even then it’s questionable. Really, the system is set up so that MFS is a bad filing status. In 99% of the time, you’ll either be paying more or you’re doing it wrong. For example, neither one of you can be HoH. Don’t bother with the extra work, it’s not worth it. Now, if you went to a tax preparer and he volunteered to try it for you at no extra charge just to see 'what if"- sure.
Besides- brackets don’t work the way I think you think they do. 
Brackets are for your last dollar, not all of them. In other words, if as MFJ you earned 120,000 taxable income (I am using 2005 rates but those that were estimated last year, so don't use these OK?)- you'd be in the 28% bracket. **For 50**. From $59,400 to $119,950 you’d be in the 25% bracket, for $14600 to 59400 in the 15%, and from 0 to 14,600 you’d be in the 10% bracket. MFS brackets are basicly 1/2 those for MFJ.
That’s why I’m having so much trouble with my situation. I’m married. Both of us work. If I do it jointly, we end up owing around 3k. If I do it separately, but adjust my withholding to “married, but withhold at the higher single rate”, we end up both getting refunds. We just got killed by this years tax bill, and I’m not going to have that repeat.
Sigh. For taxes, it sure was easier being single. Just for taxes, mind you.
It’s perfectly OK to withold at a higher rate. You can also just have “0” withholding exemptions. Or even have X$ extra taken out per check.
But- and I am not a tax expert but my brother is- you should not be paying less by filing MFS. Normally, you’ll pay more. If you think your paying less, you’re probably doing something wrong. You DO know you can’t file as Single or HoH, right?
Exactly. Don’t confuse the amount of your refund with the actual taxes you are paying.
Scenario 1: You have $4000 withheld and get a $1000 refund.
Scenario 2: You have $1500 withheld and pay an extra $500 when you file.
Which scenario involves paying more taxes?
Well aware. I’m going by the IRS tax calculator on the IRS website. First, we don’t itemize. We don’t own a home or have a mortgage. Without getting into specifics on our earnings, if I do the calculation with our salaries married filing jointly, we end up owing close to $3000, and it gives us a breakdown of what to add to our withholding. If I do it married filing separate, and we check the “Married, but withhold at the higher single rate”, we end up getting a refund. This is with no exemptions on either. If I do 2 exemptions on mine and 2 on my wife’s, we each end up paying about $100, which is how we’ve changed our W-4’s.
We’re ending up owing quite a bit this tax season, by me not getting our withholding right. This is why I went through their calculator, so I don’t have to worry about it. I’m not worried about getting a refund, I just don’t want to end up owing four figures come next April.
Excellent point. All other things being equal, if you’re married filing separately it is to your advantage to push deductions to the person with the higher salary, because it would reduce the taxes by the largest percentage. (However, note other advice that you generally are better off filing jointly.)
Well, yes- but that’s because you’re increasing your withholding on a W4, not changing your Filing status on your 1040. Please dudes- do not get confused over your WITHOLDING filing status (which can be more or less anything you want as long as you don’t owe a bunch) and your 1040 Filing status (which is rigidly precribed by Code). In other words- a married dude can put “single” down on a W4, but NOT (except in some rare cases) on a 1040.
If you calculate the total tax paid (not the tax DUE which is something else entirely) then MFJ should be less than MFS. My brother says that really- MFS CAN’T be less than MFJ (there are some cases where it’s a better choice, for legal reasons).
Yes, I understand entirely not wanting to owe at tax-time, and if so; you should increase the amount withheld from your taxes.
Ok, gotcha. My fault for the mix-up. This whole thing has got us messed up anyway, but I think with the changes it’ll be straight. The withholding will be more, but I won’t get killed come April 2007. And yes, you’re right, when I calculated it the other way this year, it was more if we filed separately.
Sorry for the confusion :).