MFS - What Do You Charge?

[zeros]

Couple came in and wanted to have their returns prepared MFS. I think this was because of some gambling issues that one had and the other didn't want anything to do with filing jointly. Anyhow, I charged for both returns rather than one because I prepared two returns. The client questioned it a little. Charged the same amount for each. What would you have done?

[MDEA]

mfs

I would charge each one for a separate return.Two returns two fees.

[Jiggers]

You prepared 2 returns, correct? 2 fees.

You pay for one bag of groceries at the supermarket.

Next time you buy enough to fill two bags. You pay for two bags, not one.

[ATSMAN]

Couple came in and wanted to have their returns prepared MFS. I think this was because of some gambling issues that one had and the other didn't want anything to do with filing jointly. Anyhow, I charged for both returns rather than one because I prepared two returns. The client questioned it a little. Charged the same amount for each. What would you have done?

Some taxpayers are confused so it pays for us to educate them the MFJ vs. MFS issues first and given the situation figure out if it is going to be Std. deduction or itemized etc. I always tell them that this is 2 separate returns so the charges will be separate and may be different , if for example one person has more W2 or 1099s and additional state etc.

I have one client where the wife files only one state but the husband being a truck driver has to file at least in 4 to 6 states plus has Sch C. So different rates for each.

[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.

[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!

[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!

[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.

[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

[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]

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

[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.

[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?

[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

[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.