MFS to MFJ, to claim stimulus.

[MRPLOW]

Is there anything preventing a Married couple with 2 children (Husband makes $175,000 and wife makes $5,000) that is over the phase-out limit for the 3rd-stimulus, from filing MFS and putting the children on the wife's return to receive the the 3rd-stimulus of $4,200 ($1400 x 3) for her and 2 children. Then amend return's at a later date back to MFJ, and keep the stimulus of $4,200.

Comments...

[BOB W]

I've heard of people doing it. It was even published in newspapers and on the internet. I've never been approached by client but if they did ask I'd say I won't process their return.

[Twin Turbo Z]

Or reconcile it in 2022 when doing 2021 taxes. Save the hassle of amending.

[MRPLOW]

Or reconcile it in 2022 when doing 2021 taxes. Save the hassle of amending.

This is NOT a reconcile. There is a huge MFS penalty on the 2020 return, but ultimately this will wash out, after they amend back to MFJ in 6-months. Bonus, they now have a $4,200 stimulus check. They won't qualify for a RRC/stimulus on the 2021 return.

[Dude]

kind of like focusing on the Free Food sign while ignoring the lion sitting next to it....

[ATSMAN]

DIY folks can play all those games BUT I am not playing that. I have been approached to amend tax returns to take dependent children out and file the children with their own exemptions and I am not doing it. IRS will catch on to these schemes real quick and I am not risking my PTIN and EFIN.

[Lion]

Taking a child who is a dependent and claiming he is not is wrong. A married couple defaulting to MFS instead of choosing to file MFJ is perfectly fine; in fact, it's the only way to file unless both agree to file MFJ.

[BOB W]

Taking a child who is a dependent and claiming he is not is wrong. A married couple defaulting to MFS instead of choosing to file MFJ is perfectly fine; in fact, it's the only way to file unless both agree to file MFJ.

Are you saying it is OK to file MFS just to get the extra stimulus?

[Lion]

Of course. However, the higher MFS tax rates and paying for two sets of returns and losing some credits not available to MFS will make it necessary to run the numbers to find the most beneficial filing status. I always compare MFS vs MFJ, but this year it's made a difference more than usual. You can always report the least amount of tax liability that's legal. For instance, don't you look at depreciation: SL vs MACRS vs 179 vs bonus depending on what's best for your client this year &/or what will help them over time?

[Anarchrist]

Are you saying it is OK to file MFS just to get the extra stimulus?

Yes, of course. It's perfectly fine to take advantage of the unintended consequences of idiotic laws.

[Lion]

That's how we got backdoor Roths!

[DoubleO]

The problem I have with the OP is amending later to MFJ. I would not do the amendment.

[Rapid Robert]

Bonus, they now have a $4,200 stimulus check. .

What's your cut?

[Twin Turbo Z]

I know with "Our Railroad" , We had one similar to the OP situation. They were filed way before the bill was passed. The spouse, who saw all the crap online about amending, called and wanted us to amend. I said we will "RECONCILE" it on 2021's filing. Told them, if thats an issue I will give you Plowman's number. Sorry MrPlow's number. He will fix you up. I imagine it will be fall of 2022 before any amended returns see that amended money !! If then !! Dont take offense, just joking with you Plowman. You drive that train how you see fit Casey !!

[TAXNJ]

Those reply posters who oppose what the Original Poster is recommending, can you cite if it is illegal?

Whereas, the Original Poster and the reply posters below indicate it is not.

Yes, of course. It's perfectly fine to take advantage of the unintended consequences of idiotic laws.

You can always report the least amount of tax liability that's legal. For instance, don't you look at depreciation: SL vs MACRS vs 179 vs bonus depending on what's best for your client this year &/or what will help them over time?

One can legally avoid tax but not EVADE.