If you are filing a return for a married couple, you have two choices for filing status: Married Filing Jointly or Married Filing Separately. To be sure that your clients pay the lowest tax, you may want to figure the return both ways. It’s usually more advantageous for a married couple to file jointly. However, if the husband and wife’s income levels are comparable, you may want to enter your clients’ information into the Quick MFJ vs MFS Comparison module in order to determine the better of the two choices for your client prior to filing the return.
The ‘Quick MFJ vs. MFS Comparison’ module will allow you to enter the basic income, adjustment, and credit information for a client. The joint information is displayed in the first column and the taxpayer’s return information is displayed in the second column. This will indicate with each option the amount of a refund or the amount due based on the filing status and help determine the most beneficial way to file.
Separate returns could produce tax savings if one spouse has lots of medical expenses and a low income. By filing separately, the partner with the doctor bills might be more likely to meet the threshold needed to itemize medical costs.
IRS law states that once the due date of the return has passed, the taxpayers cannot change a MFJ tax return to MFS tax return. They can however change the returns before the due date.
The ‘Quick MFJ vs. MFS Comparison’ module can be accessed from two different places in the Keystone Tax Solutions Program. Select the links below to show/hide additional information: