jump to navigation

Tax Tip of the Week | No. 236 | How Are You Going To File Your Taxes? February 12, 2014

Posted by bradstreetblogger in : Deductions, Tax Planning Tips, Tax Preparation, Tax Tip, Taxes, Taxes , trackback

Tax Tip of the Week | February 12, 2014 | No. 236 | How Are You Going To File Your Taxes?

Some tips are worth repeating…a reminder each year:

If you were legally married on 12/31/13, the IRS considers you married for the entire year of 2013.

You now must decide if you are going to file as Married Filing Jointly (MFJ) or Married Filing Separately (MFS).  Note, however, if you file MFJ it is an irrevocable election—you cannot go back and amend a MFJ return to a MFS return.

The primary reason to file MFS is to pay less tax.  It is a particularly beneficial filing status to save on the amount of Ohio taxes paid.  Another reason to file separately is to avoid joint liability.  Each spouse who signs a joint return is responsible for the accuracy and tax liability on the return.

Many times, for example, in a second marriage situation we see couples who have a desire to maintain separate financial responsibilities.  While this is understandable, it could lead to paying several thousand dollars in additional taxes.  If you file MFS, you will lose the following:

–    Credits for child care, education, adoption and the earned income credit
–    Student loan interest deduction, tuition and fees deduction, and savings bond interest deduction
–    If one spouse itemizes, or takes the standard deduction, the other spouse must do the same.  (That is, one cannot itemize and the other take the standard deduction.)
–    A greater percentage of your Social Security benefits may be taxable
–    Your ability to contribute to traditional or Roth IRAs will be greatly limited
–    Capital losses will be limited to a maximum of $1,500 per spouse
–    Passive losses will be limited

Before filing your return you need to look at both MFJ and MFS to see which lowers your tax burden the greatest.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW

…until next week.

Comments»

1. Shellie - April 22, 2014

I have been surfing online more than three houds today, yet I never found
any interesting article like yours. It is pretty worth enough
for me. Personally, if all website owners and bloggers made
good contet as you did, the net will be a lot more useful than ever before.

2. larry reynolds cpa deerfield beach fl - September 7, 2014

On the other hand, internal employees push for salary raises
to survive the harsh economy. Another federal tax break available to homeschoolers is the charitable contributions deduction.
This article is not intended to be specific tax advice.

3. he has a good point - October 11, 2014

That is very fascinating, Youu are a very professional blogger.
I’ve joined your feed and stay up for in thee hunt for more
of your magnificent post. Also, I’ve shared your website in my
social networks