Can a couple filing married filing separate with three qualified children push all the children to the parent with the lower income to take full advantage of the child credits? Joint filing limits the credit. Because of Ohio's tax structure MFS can save hundreds if not more in certain situations.
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I am not sure which credits you are referring to. Most credits are disallowed when filing MFS. -
MFS can create problems
To confirm Gretel's comment:
Married filing separately closes a LOT of tax doors.
Do your research. Enuf said!
FEComment
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Yes you can move the kids to any parent you like. Especially when one is around 60k or higher and the other below that. Can save hundreds in CTC by letting the lower income spouse claim the kids. We are in Ohio also and yes the tax structure of Ohio makes it very advantageous to file separate if the couples incomes makes it so. Always figure it both ways. Here in Ohio you may loose a few bucks on the federal side, but can gain alot on the state.Comment
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TTZ is correct. If a child qualifies as a dependent for both parents, either parent can claim the exemption on a MFS return, as long as they both don't claim the same child. Whichever parent claims the dependent exemption, and only that parent, also gets the CTC (including the ACTC), the EITC, and the child/dependent care credit.
Having said that, in almost all cases MFS will result in a higher combined federal tax than will a single MFJ return. I know nothing about Ohio taxes, so perhaps that state's tax structure can produce an overall lower tax via MFS returns, but even if it does, is the savings more than the higher federal tax? Also, can people file a MFS return in Ohio if they file a MFJ federal return?
The only way to find out what filing status works best is to prepare F&S returns both ways and compare.Roland Slugg
"I do what I can."Comment
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As Twin Turbo Z pointed out, when the Child Tax Credit starts to get phased out on a Joint tax return, a larger or full credit may be available on a Separate return, which is probably the most common scenario of MFS giving a better Federal result than MFJ.
Iowa is another state that I've heard that filing Separately very often gives the best result.Comment
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[QUOTE=FEDUKE404;184775]To confirm Gretel's comment:
Married filing separately closes a LOT of tax doors.
Do your research. Enuf said!
I know all about married filing MFS vs MFJ. Do many MFS saving hundreds of $$$. Had a new client his last tax person (CPA) stated if you file separately kids had to go to highest income? I have been giving the exemptions to the spouse it benefits the most for years so I researched again finding nothing saying you can't. I know how to research. I know MFS separate rules and tricks pretty well. Better than most that replied obviously. Thanks Roland and Turbo. You answered my question.Comment
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MFS can create problems - revisited
[QUOTE=Bucky;184813]I don't deal with any MFS "let's pick who gets the kids" matters because. . .well, my clientele base has few that would fall into that category and OH state returns are not an issue.
My comment was related to things that CAN go away (aside from the additional tax prep costs involved for two returns) when MFS rears its head. Things that come to mind include loss of student loan interest, reduction in Social Security exclusions for taxable amounts, cannot claim dependent care expenses, allowable passive loss amounts are reduced, both spouses most itemize OR take the standard deduction, education tax credits (and EITC) can be limited or eliminated. . .and I'm sure there's much more that does not come to mind right now.
Just sayin'
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