Recentlyy, I met with a client and her husband to work on setting up
Quickbooks. Since they have a business together, but also do freelance
work separately, I needed to figure out whether it was necessary to set up a
separate Quickbooks file for each. That got me thinking about how
married couples should file their taxes.
Taxes more than love will keep couples together, or not. For income
taxes, should you file married jointly or married separately? With most
things in life, it depends. The objective is that you want to get the
biggest tax benefit, so you have to evaluate which method is best. You
will have to look how much income each of you made during the year, who
incurred the most deductible expenses and maybe what state you live in.
Usually married filing jointly can yield a tax savings, particularly
where the spouses have different income levels. If you have children it
is almost always better to file jointly since you take full advantage
of adoption expense credits and dependent child credits.
Filing separately may be good if you a lot medical expenses and
itemized deductions. If you are doing taxes yourself, I suggest running
the numbers through TurboTax both ways to see which one is best. Keep
in mind the business deductions on your schedule C with a 1040 as well.
A gentle reminder: April 15 is only 47 days away.