Typically, a married couple benefits from filing a joint tax return, but not always. In some limited cases, you may do better overall by filing separate returns. Reason: One spouse may have a disproportionate portion of a couple’s expenses subject to deduction threshold.
Example: You and your spouse have a joint AGI of $100,000 of which $90,000 is yours and $10,000 is your spouse’s. In 2013, your spouse had unreimbursed medical expenses of $9,000 while you had none. Your spouse paid for her expenses out of her own separate account. If you file jointly, you can’t deduct any of your medical expenses because your qualified expenses don’t exceed the 10%-of-AGI threshold of $10,000 (10% x $100,000).
However, if you file separate returns, your spouse can claim a medical deduction of $8,000 on her separate return (the excess of $9,000 over her 10%-of-AGI threshold of $1,000).
Tip: Filing separately affects other tax return items, so don’t make this decision in a vacuum.
- Small Business Tax Deduction Strategies No matches