Meridian Star

Business

May 25, 2014

Is ‘married filing separately’ ever the right filing status?

MERIDIAN — In most cases, married couples are better off electing joint status when filing their income tax returns. But in a few situations, electing to file as “married filing separately” (MFS) can be the wiser approach.

    (Note: If you were married on December 31, you generally must file as either married filing jointly or MFS for the entire year.)

    Electing MFS may lower a couple’s combined taxes in certain situations. For example, innoncommunity property states, when one spouse has a disproportionate deduction of a type subject to reduction by a percentage of income (such as medical expenses, casualty losses, and miscellaneous deductions), filing MFS may produce a lower overall tax liability for the couple.

    If you live in a noncommunity property state, electing MFS means you’ll only report income that you earned and deductible expenses that you paid as an individual. The nine community property states, however, generally allocate community income and expenses equally to each spouse, regardless of who actually earns or spends the funds. Thus, in some circumstances electing MFS is less likely to benefit residents of community property states.

    Couples who file jointly are jointly liable for that year’s return, which means the IRS can pursue either spouse for all or any part of their combined taxes. If you file MFS, you’re only liable for the tax that’s shown (or should be shown) on your own return. Therefore, MFS status may be desirable if one spouse wants to avoid liability for the other’s possible actions. This might apply where divorce or separation is a possibility or the other spouse is not reliable regarding tax or financial matters.

    Some credits and deductions aren’t available or are subject to stringent limitations under MFS status. When considering this election, always calculate your tax both ways before filing.

    David Compton is a Certified Public Accountant with offices in Meridian and Birmingham, Ala.

1
Text Only
Business
Biz Marquee
New Today
Poll

Are you for or against Common Core — which is mandated by the state — being taught in Mississippi schools?

For
Against
     View Results
Facebook
Facebook
Twitter Updates
Follow us on twitter
AP Video
Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN Raw: Deadly Landslide Hits Indian Village Obama Chides House GOP for Pursuing Lawsuit New Bill Aims to Curb Sexual Assault on Campus Russia Counts Cost of New US, EU Sanctions 3Doodler Bring 3-D Printing to Your Hand Six PA Cops Indicted for Robbing Drug Dealers Britain Testing Driverless Cars on Roadways Raw: Thousands Flocking to German Crop Circle At Least 20 Chikungunya Cases in New Jersey Raw: Obama Eats Ribs in Kansas City In Virginia, the Rise of a New Space Coast Raw: Otters Enjoy Water Slides at Japan Zoo NCAA Settles Head-injury Suit, Will Change Rules Raw: Amphibious Landing Practice in Hawaii Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide