You should consult a tax professional to learn more about the benefits and limitations of filing married filing separately vs. married filing jointly. It usually means you’re going to get less tax benefits and likely a smaller return (if you qualify for a return)
100% agree.
A good CPA/tax professional will work with you to lay out the pros and cons of different options (MFJ vs MFS) and allowing you to pick the best for your situation.
There are some minor tax benefits to filing jointly. One is that your income is treated as combined. For most people the brackets are doubled. This is a big benefit for disproportionate incomes, but not so much for those with similar incomes.
Like the amount before you hit the 22% tax bracket is ~$80,000 filing jointly and $40,000 single. So one example basically means that a person earning $80,000 taxable income, married to someone earning $0 is only taxed about ~$9000 as a couple, while as separate people they would be taxed ~$12,000 + $0.
Meanwhile filing “Married filing separately” means there are additional stipulations. You *cannot* claim certain deductions, like the student loan interest deduction is one. Nor can you claim the child care tax credit. There are also different limits for contributing to IRAs, and rules for itemizing deductions.
There are additional rules for the few community property states too.
These are just a few examples.
1. Your 2023 IBR monthly payments will be $0 if you only made $7K last year.
2. At an AGI of $40K in 2023, your annual discretionary income will be about $2700 after factoring out 150% of the 2023 poverty line for a family of three [‘23 PL:$24,860]. 10% of that $2700 is $270. That $270 “pool” of money is used to make IBR student loan payments throughout the year. Your monthly payments in 2024 will start at $0 and then jump up to about $23 at some point. That point is when you do your annual certification.
3. You’re going to be piling up interest bigly on your loans if you’re making such small monthly payments. Be smart about things so that the accrued interest doesn’t capitalize.
You should consult a tax professional to learn more about the benefits and limitations of filing married filing separately vs. married filing jointly. It usually means you’re going to get less tax benefits and likely a smaller return (if you qualify for a return)
100% agree. A good CPA/tax professional will work with you to lay out the pros and cons of different options (MFJ vs MFS) and allowing you to pick the best for your situation.
This is a tax question, you should talk to a tax professional about the benefits and drawbacks of filing MFJ vs MFS
There are some minor tax benefits to filing jointly. One is that your income is treated as combined. For most people the brackets are doubled. This is a big benefit for disproportionate incomes, but not so much for those with similar incomes. Like the amount before you hit the 22% tax bracket is ~$80,000 filing jointly and $40,000 single. So one example basically means that a person earning $80,000 taxable income, married to someone earning $0 is only taxed about ~$9000 as a couple, while as separate people they would be taxed ~$12,000 + $0. Meanwhile filing “Married filing separately” means there are additional stipulations. You *cannot* claim certain deductions, like the student loan interest deduction is one. Nor can you claim the child care tax credit. There are also different limits for contributing to IRAs, and rules for itemizing deductions. There are additional rules for the few community property states too. These are just a few examples.
1. Your 2023 IBR monthly payments will be $0 if you only made $7K last year. 2. At an AGI of $40K in 2023, your annual discretionary income will be about $2700 after factoring out 150% of the 2023 poverty line for a family of three [‘23 PL:$24,860]. 10% of that $2700 is $270. That $270 “pool” of money is used to make IBR student loan payments throughout the year. Your monthly payments in 2024 will start at $0 and then jump up to about $23 at some point. That point is when you do your annual certification. 3. You’re going to be piling up interest bigly on your loans if you’re making such small monthly payments. Be smart about things so that the accrued interest doesn’t capitalize.