Filing status for married couples: is there more than one option?

Filing status for married couples: is there more than one option?

There are three (3) options to file for married couples.

Most favorable and common is Married Filing Jointly. By filling Married Filing Jointly couple gets higher standard deduction- $12,600 in 2015.

If couple is married, but chooses to file Married Filing Separately, both spouses will have to file separate tax returns to report their own individual income, deductions, credits and exemptions. This way spouses responsible only for their own individual tax liability, and not responsible for any tax liability result from spouse’s tax return. If you chose to file MFS ( Marries Filing Separately), your certain deductions and credits are being limited, such as:
– If one spouse itemizing, the other one has to itemize to or claim “0” as a deduction. ( You cannot chose a standard MFS deduction)
– If both spouses claiming standard deduction, it will be 1/2 of what it would be on a joint tax return -$6,300.00 for 2015
– No Earned Income Credit is allowed
– No Educational tax credit – no America Opportunity or Life Learning credit, no tuition or student loan deductions
– Savers Credit is limited
– Child tax credit is limited

If you live in a community property state, it gets a bit more complicated as you need to report 1/2 of your community income and deductions in addition to your own income and expenses.
There is 3rd option when IRS consider you an “unmarried” because you lived apart from your spouse and meet certain test and can file as Head of Household. This can happened even if couple still legally married and not legally separated.

In any case contact your tax professional, so you can determine what is correct and most advantages filling status for you.

What is 941 Employer’s Quarterly Tax Return ?

Form 941 is an Employer’s Quarterly Federal Tax Return. Employers use this form  to report income taxes, social security tax, and Medicare tax withheld from employee’s paychecks, and pay the employer’s portion of social security or Medicare tax.

This form is filled out every quarter and has to be filled with IRS by April 30, July 31, October 31 and January .

If all the deposit for taxes due made timely, than employer has 10 more additional days after January 31 to file 4th quarter employer’s quarterly federal tax return- form 941 Q4.

If you are using payroll provider, it will be done by them. If you use Quickbooks Online and process payroll via Intuit, this form already pre-populated for you. But if you are using a desktop version of accounting software and process payroll manually, click here and use this video as a guide on how to fill 941 Employer’s Quarterly Federal Tax return up.  I used my company name in the header just an example.

See below where to mail your 941 Employer’s Quarterly Tax return.

Please leave comments and ask questions.

My child needs braces. Can I deduct this cost on my tax return?

So I am one of those lucky parents whose child needs braces. After shopping around for a while (my insurance doesn’t have ortho coverage) we picked a doctor. Our bill was around $5500.00. In addition during a year we had some prescription medication totaling $300 and dentist visits of $600. Total medical expenses of $6400. A lot of money, right? You would think we would be able to deduct it. For a lot people it’s a wrong assumption

Medical expenses are deductible only when you itemize, meaning you owe property and paying mortgage and real estate taxes, have some sort of donations, and may be have some work dues (not your country club dues). If you itemize then you can calculate how much of your medical expenses is deductible. It’s not 100%.  In short you can claim only difference between what you spent on medical expenses and 10% of your AGI. For example, if your family AGI is $55,000.00 your 10% is $5500.00. In my scenario medical expenses were $6400-$5500=$900. Here is a catch: your combine itemized deductions on Schedule A should be more than your standard deduction

Single and Married filling separately $6300,

Married Filling Jointly $12,600,

Head of Household $9250

if you elect to still take itemize deduction that is less than your standard deduction, you will be paying more taxes as your taxable income will be more.

Yes, you might have substantial medical expenses, but it’s not necessarily you can deduct them and if you do not always its better than electing to take a standard deduction.

See how to do it on your tax return HERE.