MFS- Everyone Wants to Know

[BP.]

What's going on?

The question everyone is asking: "Are we better off filing separately?"

Where did people suddenly get this notion? Did I miss the press release?

[Larmil]

What's going on?

The question everyone is asking: "Are we better off filing separately?"

Where did people suddenly get this notion? Did I miss the press release?

My software produces a worksheet to split a MFJ return into MFS returns. I generate (and charge for) the worksheet if the question comes up and they do like my opinion.

[gkaiseril]

If they do not know how the tax tables work, what tax benefits they lose, and when AMT hits them, it looks good.

Maybe there are a lot of student loan defaults for one of the spouses the many assume this is the way out for the injured spouse.

This is not to say that this maybe the best alternative for some couples, but that choice revolves more around the joint and separate tax liability of a joint or public disclosure for certain individuals tax returns (politicians like the John McCains).

[HRB_TMW]

Many people do mistake MFS for a solution to an injured/ innocent spouse situation. Clients should be advised otherwise. MFS is, of course, especially disadvantageous to low-income taxpayers with children.

Pub 17:
"If you choose married filing separately as your filing status, the following special rules apply. Because of these special rules, you will usually pay more tax on a separate return than if you used another filing status that you qualify for. "

Page 23 of the Pub 17 actually lists 12 disadvantages of the MFS.

[JohnH]

Well yeah, we know what Pub 17 says and what you say.

But my hairstylist says MFS is the way to go, so I'm not sure who I should believe.

[S T]

Mfs

I also had a client call stating they wanted to file MFS

Their reason stated, was

T/p married in 2009 - was divorced in 2008 - the court papers says he is to supply a copy of his tax return each year to the ex-spouse

T/P stated reason for MFS, was so the new spouse's info would not be furnished. (I also think that the new spouse had been receiving EIC on prior year's returns)

Community Property State - so I had to explain that all income/deductions would be split 1/2 of his to her, half of her to him, etc AND guess what, new spouses information would appear on the tax return!

Advised T/p to check with his attorney to see how to proceed.

Sandy

[ChEAr$]

I also had a client call stating they wanted to file MFS

Their reason stated, was

T/p married in 2009 - was divorced in 2008 - the court papers says he is to supply a copy of his tax return each year to the ex-spouse

T/P stated reason for MFS, was so the new spouse's info would not be furnished. (I also think that the new spouse had been receiving EIC on prior year's returns)

Community Property State - so I had to explain that all income/deductions would be split 1/2 of his to her, half of her to him, etc AND guess what, new spouses information would appear on the tax return!

Advised T/p to check with his attorney to see how to proceed.

Sandy

Furnish copy of return to ex spouse? That's interesting.

So then, he can file separately, furnish the copy as required, and later if
advantageous, he and present wife can amend to joint filing.

[S T]

Mfs

Harlan,

I hadn't thought of amending, but may T/p had- What T/P stated he was concerned about was, ex-spouse seeing current spouse's info, such as name, social and maybe income.

sANDY

[powerage]

in Floriduh...

I hear this stuff all of the time about MFS/MFJ

I'm told to be a tax preparer and not an adviser...but I hate big refunds and clients who do not know better, and I feel it is my duty to try to educate the taxpayer(s).

[dyne]

When a couple get married, they almost ALWAYS believe it is best to file
separately. It is almost NEVER better to file separately. I often use my software
to calculate it to show them that it is NOT better to file separately.

[WhiteOleander]

I also factor in the cost of preparing two returns.

[taxdude71]

I have a few clients that file MFS every year. The main reason being divorced and remarried. Generally, when client is self employed, the ex gets support money based on income in the year of divorce. Every few years the ex will take them back to court to get more. Most of the time the reason for the MFS is so current wifes income doesn't show up on the return.

[AJsTax]

In some states

it is often an advantage to file MFS. We check it on every married couple and probably split 30% into MFS. big differrence to us compared to the store fronts down the street is that we charge for one extra form to split, not another whole return. The software does the work quite well.

[BP.]

Well yeah, we know what Pub 17 says and what you say.
But my hairstylist says MFS is the way to go, so I'm not sure who I should believe.

You nailed my subtext.

When a couple get married, they almost ALWAYS believe it is best to file
separately. It is almost NEVER better to file separately. I often use my software
to calculate it to show them that it is NOT better to file separately.

Precisely

I also factor in the cost of preparing two returns.

Me too

we charge for one extra form to split, not another whole return

I'm on the hook for signing another whole return, so . . . I'm with WhiteOleander on this one.

I generate (and charge for) the worksheet if the question comes up

So you're saying I should use this wave of inquiries as a revenue enhancer? I like it!

And like most of the rest of you have commented, there are often mistaken reasons, or no reason at all. At least your client, Sandy, had some strategy in mind. It just seems like I've received more questions on this topic this year than an all past years. Thanks for all the comments.

[RitaB]

SS Recipients

SS recipients frequently want to know if they should file separately. (And of course: "What is the age where you don't have to file returns?" and "What?! I have to pay tax on my SS?!))

One guy asked me EVERY year about the MFS, and just couldn't get his mind around my explanation on the MFS, so I just did the return both ways and told him to file the one he preferred.

I'll be honest, just doing the return both ways often saves me time. Either I can't get it across properly (and I do run a copy of TTB or IRS explanation) or they just don't want to believe it.

Same with Sch A. I explain it the first couple of years (and complete it, too). Then, I just yank the paper out of their hands, say thanks, do the thing, and they think they got to deduct their $455 in medical expense, and $320 in "tithes". No, I don't charge, but it's quicker than explaining.