Married Filing Seperate question

[WCB]

Yes I will verify before I do anything...

Question:

In Texas, community property state, do we add all our income together including her unemployment and divide in half? Same with withheld tax?

[BrandonA]

She claims hers and you claim yours. Joint income is split .

[Bill]

I believe this is the answer, but I'd check with the IRS publications or an accountant.

When you file a tax return as Married Filing Separately, you and your spouse each report your own individual income, deductions, credits, and exemptions on different tax returns. That way, you and your spouse are only responsible for your own individual tax liability.

[swanjts]

They are totall separate. I just got married last October and I asked my CPA if we should file seperately or joint since we were only married for a couple of months in 2015. He said most definitely file joint. We came out much better tax wise that way.

[meltingfeather]

Yes I will verify before I do anything...

Question:

In Texas, community property state, do we add all our income together including her unemployment and divide in half? Same with withheld tax?

No, you each file your own income separately... as if you were individuals.
It is an EXTREMELY rare circumstance that filing separately is advantageous... from a financial perspective, that is.
Sounds like you will do your homework before pulling the trigger on that decision, which is wise.

[WCB]

Reading pub 555 about community property states and using form 8958 it shows to split everything in half. That's where my confusion lies... Jointly is way less than seperate by the community income worksheet.

[Razorback01]

WCB, in reality, what is yours- is hers!

Joking, not sure how Obama sees it.

[BTLowry]

Has always been my understanding that you come out better if you file jointly.

I am sure there are some circumstances that you would want to file separate but I don't know what they are.

[WCB]

Figured jointly first then tried separately with my money to me and her money to her. We came out way better. Then I noticed where 1040 talked about community property states and pub 555, form 8958 splitting everything in half and we made a boatload more that way. Need to call IRS first then possible a CPA.
We'll either get $$ or $$$$ or $$$$$$ back...

[Bill]

I think it may be referring to investment income from jointly held property is split evenly but wages are your own.

[ken]

I think it may be referring to investment income from jointly held property is split evenly but wages are your own.

This and deductions from jointly owned property like property taxes on your home.

[WCB]

I think it may be referring to investment income from jointly held property is split evenly but wages are your own.

This and deductions from jointly owned property like property taxes on your home.

Pub 555 and form 8958 have wages and investment/dividend places.

This is a quote from Publication 555 Introduction.

"Community property laws generally. Community property laws affect how you figure your income on your federal income tax return if you are married, live in a community property state or country, and file separate returns. If you are married, your tax usually will be less if you file married filing jointly than if you file married filing separately. However, sometimes it can be to your advantage to file separate returns. If you and your spouse file separate returns, you have to determine your community income and your separate income."

Even if we figure "mine is mine" and "hers is hers", we get more back than filing jointly. It puts us both in a lower tax bracket.

[Bill]

Assume the taxable amout jointly (after all deductions) is:

Tax on $98k filing jointly is $16,094
Tax on $49k filing single is $7,800

It appears it's better filing single, but those are the taxable income AFTER your deductions. If you file separately, and do not own a home (no interest and property tax deduction) and take the standard deduction it may be advantageous. But if you own a home and split the deductions (if you can do it at all) then each of you can only take 1/2 of the deductions and your taxable amount would be higher.

In other words, if it always worked, everybody would be doing it.
I never ran the #s that way for my wife and I.

I keep wanting to list 10,000 Spanish-speaking dependents and say their SS numbers are all a lie anyway, so at this point what does it really matter?

[WCB]

I own my home outright and am not itemizing any deductions.

Only have wages and no other income. Somehow my wife made way less than me and paid in almost identical taxes. Just talked to my guy and he will check them out this weekend. After telling him the amount of tax withheld vs our income and filing separately, and yes it is community income (Texas is a community property state), we add everything together and divide in half. We "might" possibly change jointly ~$1600 to ~$11000. If this works even close to what I've figured I will update the green screen.
A CPA is by state. My guy is licensed in all 50 states by the IRS to do taxes and does several pro sports figures. ex: A Dallas Cowboy plays a game in NY he then also has to do a NY State tax return along with his federal return. My wife ran into this a couple of years ago when Verizon Union up there went on strike and my wife was sent there to work. We had to file a NY return as well as a Federal return...

[WCB]

Assume the taxable amout jointly (after all deductions) is:

Tax on $98k filing jointly is $16,094
Tax on $49k filing single is $7,800

It appears it's better filing single, but those are the taxable income AFTER your deductions. If you file separately, and do not own a home (no interest and property tax deduction) and take the standard deduction it may be advantageous. But if you own a home and split the deductions (if you can do it at all) then each of you can only take 1/2 of the deductions and your taxable amount would be higher.

In other words, if it always worked, everybody would be doing it.
I never ran the #s that way for my wife and I.

I keep wanting to list 10,000 Spanish-speaking dependents and say their SS numbers are all a lie anyway, so at this point what does it really matter?

Correctamundo on you figures in bold. But jointly we are over $100K and divided in half we then drop our tax rate significantly...