Married/Jointly or Married/Separately?

Let's pick this apart and examine the parts.

' When I add my income to our joint form, we go from receiving a refund, to paying quite a bit'

That is correct. You had zero tax withheld because you earned at such a low rate, you would not owe any. The payroll software most likely recognizes this and does not know about any other income you have, so does not estimate what tax to take out based on anything other than what you have on your W-4. So, adding that money to your husband's puts that money in his bracket, the 15% marginal bracket, instead of the zero bracket you are in filing separately. You should be seeing about a $900 difference between a refund based on income $63,000 and a refund (or having to pay) based on $69,000, when filing a joint return.

'When I start filling out a form on my own, it says I won't have to pay taxes.'

Yes. As I said, you are in the zero bracket if you file separately.

So, it would seem that you make out better by filing separately. But, you forgot one thing. If you file separately, your husband does too. His tax will not be what you looked at. It will be higher, because married separate filers generally pay the same tax as a single filer.

So, what you do is have him see what he pays if he files separately. If that is more than what you pay filing jointly, then you should file jointly. And I think that is what you will find.

What happens to HIS tax return when you file HIS information as married, filing seperately.

The only way to know what is really "better" is to fill out EVERYTHING both ways and see how it works out.

You also need to change how both of you file your W-4 forms. Fill out the W-4 to say that you are claiming married, but filing at the higher single rate. BOTH OF YOU need to do that. If you don't have children yet, then you could claim one exemption each W-4 or claim 0 on one W-4 and 2 on the other W-4.

To do a proper comparison you have to compare the combined result of filing both your return and his as "married filing separately"

In other words, go back in your software, remove your income, and change his status to MFS. Compare how much he would owe vs how much you guys owe on a joint return with your income. I can almost guarantee that he will owe significantly more as "married filing separate" then if you just file jointly with both your incomes.

Usually, it is almost always better to file married filing jointly. Married filing jointly is like the golden-most-favored status of the tax code. However there are a few cases where married filing separate status can benefit you. It looks like you may have found one. Be careful here though. Married filing separately can also disqualify you from a lot of credits that you may usually qualify for.

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try filing both ways and see which one works the best for the two of you