Married Filing Separately

[Christian]

Rarely ever do I file one of these. An older client remarried last year. She advised she wanted to file separately and retained her prior name electing not to use her new husband's last name. Her income was limited and as a result no tax was due and no payments refunded. She later called and requested I prepare her new husband's return which I am giving him today. To my surprise there is a distinction between a couple who live together using this filing status and those couples who at no time during the tax year live together. Both of these folks draw social security. As a result of the above noted distinction he will owe tax on 85% of his benefit which was not the case when he filed as a single man. I find this really surprising and have advised them to file jointly next year. 

[Lion EA]

Or, amend her return as MFJ including her husband's tax data now.

[BrewOne]

the first time a couple files jointly, they may find out something unpleasant about the other's past.

However, with no withholding, then there's not much chance of losing a refund.

But as a rule of thumb, I'd probably want an 8821 for the new client to check their account.

[mcb39]

She doesn't have to change her name to file MFJ.  It's all in the TIN.  I had a married accountant who filed separately for years because his new spouse wanted to stay with her accountant and he wanted to stay with me.  Unfortunately, because she owned the home, she got all the itemized deductions and he got zilch.  People have funny ideas or get bad advice from somewhere.  My client has since passed on.  She has not and has the benefit of all of his possessions.

[Christian]

After discussing their options they decided to go ahead and file MFS even though he will pay a larger tax. Most likely they will take my advice and file jointly next year. Her retaining her former name was not the issue so things worked out ok. Better than some outcomes I have run into over the years.

[schirallicpa]

This is more of the ill-logic of our tax system.  I have advocated for single payer status for everyone.  Forget all this married stuff and dependents and credits.  You get a w2, the exact taxes are withheld and you don't have to file.  You have a business, you figure out your income and file a return.  No kids on returns.  No credits.  No arguing.  You're liable for yourself.  Would make the system easier and less abused.

[BrewOne]

A good start for simplification would be to end Head of Household as a filing status.  It confuses taxpayers and is needlessly complicated. Increase the standard deduction and the 10% tax bracket (main benefits of HoH) and no one gets hammered and one less thing to worry about. 

Of course this will never happen.

[Medlin Software, Dennis]

Ease would mean less budget/employees at the tax agencies, so it will never happen. 

[Lee B]

2 hours ago, Medlin Software, Dennis said:

Ease would mean less budget/employees at the tax agencies, so it will never happen. 

It has nothing to do with this. It's all about our elected representatives getting re elected.

[Medlin Software, Dennis]

53 minutes ago, cbslee said:

It has nothing to do with this. It's all about our elected representatives getting re elected.

Many things are at the end of the follow the money rainbow. Did not want to get a no politics message though.

[Patrick Michael]

Simplifying the tax code will never happen because it's used for far more than raising revenue.  It is used to reward supporters through loop holes and credits and to push social agendas.  Want to push EV's even though the market is lukewarm to them because they are not piratical yet, offer a credit.  Want to reward your biggest donors, create  credits and tax breaks that favors them.  But it's not always bad.  IRA's, 401K's, and other retirement plans do make it more attractive to save for retirement, raising the quality of life for seniors.