MFS - What Do You Charge?

[Lion]

I get a nice spreadsheet or table right in the MFJ return, so it's easy to look at joint items that can be adjusted to either the dollar amounts or the percentages that I want to optimize the resulting MFS returns before I split the returns. And, just like those TurboTax returns, I can keep trying until I get the results I want !! But, I know what I'm doing -- usually.

[taxcraft]

taxcraft

When looking at a possible savings for filing MFS in Ohio you keep in mind that the Ohio return starts with AGI, no effects from itemized deductions. The goal is to equalize the taxable Ohio incomes for both. The is done by shifting income ABOVE the AGI to the LOWER wage person and itemized deductions to the HIGHER wage person. This is much better than the simple equalized splitting offered by most software. Remember the Federal return is unaffected, ie, MFJ = MFS.

[ATSMAN]

Interested in this "split return" button. I have a worksheet I can bring up which does this for illustrative purposes, but it does not actually produce two tax returns. Does yours?

Yes it will split a MFJ into 2 MFS returns with the amounts for various items allocated if you code it correctly. So for example W2/1099 etc. flow correctly. The problem comes from items like mortgage payment or donations where it is not 50/50 and taxpayers have to tell you how they will split those.

[Lion]

I can split one MFJ into two MFS returns with a click. I end up with all three returns in my system, so going back or having the original MFJ to roll over next year works. Very handy. I use ProSystem fx.

[ToledoEd]

Drake software does allow you to split a joint return to 2 separate returns as long as you remember to code every entry (T)axpayer, (S)pouse or (J)oint. I use it as a starting point and then tweak both returns for fine tuning.

[FEDUKE404]

Additioinal return

Interested in this "split return" button. I have a worksheet I can bring up which does this for illustrative purposes, but it does not actually produce two tax returns. Does yours?

Depends upon what you mean by "produce two tax returns."

I can use that option, save the file with another name, and then effectively move "his" and "hers" into the active columns, to include deleting what isn't needed (such as H W2 on W's MFS return).

Of course, Plan B is to keep the MFJ file intact, and then create TWO new files and then proceed in much the same way. Printing the MFJ/MFS worksheet helps also. . .I get easily confused.

FE

[Burke]

My software allows you to split the return into MFS also BUT it does require quite a bit of tweaking to get it right. I use the auto split as a projection to start the discussion and if they agree to do MFS, I prepare it accordingly. Most of the time the fight is with large ticket deductions like mortgage interest, property tax deduction etc. If one itemizes the other gets the short end of the stick!

Interested in this "split return" button. I have a worksheet I can bring up which does this for illustrative purposes, but it does not actually produce two tax returns. Does yours?

[ToledoEd]

We charge for both returns, but being in Ohio the savings in Ohio Taxes usually more than pays for the second return.
Most of the returns that we split are because of the state tax savings.

[FEDUKE404]

MFS income and student loan payments

I think he means the actual limit on loan payments themselves, not the tax break. If your income is low enough (for example on a MFS return) the loan programs allow you to make smaller minimum payments on your loans.

Thanks. I did NOT know that.

I guess the person has to make the choice between lower loan payments or tossing away the student loan interest deduction that would (might) occur on MFJ tax return.

FE

[Rapid Robert]

Not quite sure I understand your point. If a couple is using the married filing separately option, neither spouse can claim *ANY* student loan interest. FE

I think he means the actual limit on loan payments themselves, not the tax break. If your income is low enough (for example on a MFS return) the loan programs allow you to make smaller minimum payments on your loans.

[FEDUKE404]

Student loans and MFS

I had a couple do this last year. They wanted to file separate because he has high student loans and low income. MFS meant he could drastically reduce his loan payments. Anyhow, when they came to pick the returns up the wife complained about having to pay for both returns. Ridiculous dunce. Needless to say they aren't coming back this year. Maybe they will find out that in the real world everyone will charge them for both returns. I think Bernie Sanders has a couple of Michigan voters in those two.

Not quite sure I understand your point.

If a couple is using the married filing separately option, neither spouse can claim *ANY* student loan interest.

FE

[Matt Sova]

Student Loans

I had a couple do this last year. They wanted to file separate because he has high student loans and low income. MFS meant he could drastically reduce his loan payments. Anyhow, when they came to pick the returns up the wife complained about having to pay for both returns. Ridiculous dunce. Needless to say they aren't coming back this year. Maybe they will find out that in the real world everyone will charge them for both returns. I think Bernie Sanders has a couple of Michigan voters in those two.

[ATSMAN]

Prepare 1 return as MFJ, assuming your doing Husband and Wife's return.

When complete, compare/explain the tax ramifications of MFJ vs. MFS.
Let the client decide then!

Fee would be between $60-135 for the 2nd return (most are an extra $75).

Press split button on software and BOOM you now have 2 complete tax returns.
Takes an extra 5-10 minutes, outside of manually tracking carryover/passive losses.

Remember due to Child Tax Credit phase-out's and 2106 expenses, some T/P's can benefit from MFS significantly!

My software allows you to split the return into MFS also BUT it does require quite a bit of tweaking to get it right. I use the auto split as a projection to start the discussion and if they agree to do MFS, I prepare it accordingly. Most of the time the fight is with large ticket deductions like mortgage interest, property tax deduction etc. If one itemizes the other gets the short end of the stick!

[MRPLOW]

Prepare 1 return as MFJ, assuming your doing Husband and Wife's return.

When complete, compare/explain the tax ramifications of MFJ vs. MFS.
Let the client decide then!

Fee would be between $60-135 for the 2nd return (most are an extra $75).

Press split button on software and BOOM you now have 2 complete tax returns.
Takes an extra 5-10 minutes, outside of manually tracking carryover/passive losses.

Remember due to Child Tax Credit phase-out's and 2106 expenses, some T/P's can benefit from MFS significantly!

[Lion]

Did you discuss with your clients the pros and cons of filing MFJ with the injured/innocent spouse form?

I charge for the returns I prepare. I also charge if I spend considerable time on educating the client, doing research into the client's situation, running a lot of calculations or what-if scenarios, or other consultation.