Questions on filing taxes this year?

The only reason I can see for you and your wife (and she has zero income) to file separately is that she owes money and you don't want the government taking your return to pay her debt. You are missing out on a $12k deduction which depending on your effective tax rate can be anywhere from $1200 - $4440 in tax savings - every year. It might be worth it to just pay her debt.

Have fun =D

RARELY have I ever seen that MFS has worked to the taxpayers advantage. Unless there is some major reason you can not then I would go back and amend that last tax return to MFJ and do so this year as well.

You every comment tells me you have no idea what you are doing with your taxes, period. You should be worried about the 12K not some piddly 3 dollars in interest.

sleeper is wrong

IF YOU ARE MARRIED LIVING TOGETHER AND WANT TO FILE MFS YOU MAY BUT THE OTHER SPOUSE MUST FILE AS MFJ AS WELL, YOU DO NOT QUALIFY FOR ONE FILING HOH IF YOU LIVED TOGETHER.

You don't have to file, but it would be much better to file jointly since only she had income so your standard deduction would be doubled and tax would be lower, so higher refund. 12,000 more tax-free income. Even at the lowest tax bracket, that's $1,200 extra refund.

1. No.

2. No

with only one income, it's almost impossible that filing separately would make more sense than jointly.

1. No. That amount of interest is not enough for you to have to file because of it. You would not have to file unless there is some other reason (see below).

2. Probably not. There are some specific exceptions, such as a person who controls a bank account in a foreign country or has a trust account in a foreign country. But a normal person does not have to file in years when their income is as low as you said yours was.

You have no income, so you have no reason to file. The interest earned on your JOINT accounts can be reported on HER tax return. (It does NOT have to be divided - it just needs to be reported)

Now, that brings up the issue of WHY would you EVER file separately when you have no income. This will make MORE of her income TAXABLE and REDUCE her possible refund or even cause her to OWE MORE.

Her deduction for filing a separate tax return will be $12,000. That means EVERYTHING above $12,000 that she earned is TAXABLE.

If you file a JOINT return, then the deduction becomes $24,000 and only earnings above that amount are taxable.

So, for example, if she made $74,000 for the year - do you want to pay taxes on $62,000 or do you want to pay taxes on $50,000.

It DOES NOT MATTER if you have no income. You are still allowed to file a joint return. In fact, one income couples are the BEST reason for filing a joint return.

Amounts under $5 are not reported to the IRS on 1099. It's still taxable income, but your wife can report the full amount of $3.34, or $3 if rounding is used. You wouldn't have to file.

But you should still look at filing jointly anyway. If she files separately, not only is she taxed at the higher single rate, but she gets only the $12,000 standard deduction. Together, you get $24,000 - plus tax at the lower MFJ rate.

Filing jointly or separately is a choice you make on your own. If you file jointly the tax due should be a lot less. IRS isn't going to worry about how you handle you huge interest income.

Why would you file separately this year? If you do, you're deducting your $12,000 deduction from ZERO instead of deducting it from her income.

If you file together, she gets the whole 24k deduction instead of just hers at 12k.

ETA: "Can you even file married jointly if one person was unemployed and doesn't need to file?" Yes of course you can and you should which is why I suggested it.

As far as your other questions go, they're irrelevant. And if you were using Turbo Tax you'd know that. Do your own homework, cupcake.