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rnelsonee t1_iy4mbbn wrote

Reply to comment by mudra311 in Claiming spouse as dependent for only part of the year. by mudra311

Any particular reason why you want to file separately? You'd give up the advantage of being able to combine your incomes, which is a big benefit if your incomes for the year are relatively unequal.

Note what your company thinks, or what your insurance is set to, or what you put on your W-4 has no bearing on how you file. If you're married on 12/31, you're married for tax purposes. So you can choose to file separately (you each have your own AGI which can be beneficial, but you pay the higher tax rates single people pay) or you can file joint and combine incomes with the tax bracket thresholds set at 2x the Single rates.

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mudra311 OP t1_iy4nr4w wrote

Everyone else is saying to file jointly. So that makes sense.

They did have their own AGI up until August, and then they started working again a couple of weeks ago, albeit at a much lower salary. So I'm assuming that it makes the most sense to file jointly then? It looks like that does bumps us down to 22%.

Appreciate all the responses here. It is obviously my first time filing jointly.

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rnelsonee t1_iy4p1uv wrote

>They did have their own AGI up until August

For whatever it's worth, that's not how it works. Your 2022 taxes are based on the year 2022, which is kind of a theme you're discovering in this post. If you file joint, your incomes are combined (hence the term) and you, collectively, have one AGI for 2022. So if you file joint, your spouse did not have their own AGI in January, or August, or December, and neither did you. Your AGI didn't go up from January through December, either. It's just one fixed number that is set based on your combined 2022 income (minus adjustments).

You likely want to file joint, but say one of you is on an income-based repayment plan for student loans. That's one instance where giving up the tax advantage of combining incomes may outweigh having two separate AGI's (IBR payments are based on AGI).

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mudra311 OP t1_iy4xzbp wrote

The reason I am asking these questions is I've seen variable advice on filing separately, which is why I initially was confused. You provided a good example w/r/t IBR, under which neither of us would fall. The other scenario I could see with filing separately is if our combined income bumps us up into a new tax bracket (which I can't imagine happens often).

I will play around with some calculators, but it appears based on brackets that it would be more advantageous to file jointly.

Again I appreciate the explanation.

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rnelsonee t1_iy51tle wrote

> The other scenario I could see with filing separately is if our combined income bumps us up into a new tax bracket (which I can't imagine happens often).

Just to provide some clarity and save research, that can't possibly happen unless you make $647,850 or more combined.

If you look at tax brackets, you will notice the joint numbers are exactly double that of Single (and Single brackets are the exact same as Married Filing Separate). Same holds true for the standard deduction. So if you make $50,000 taxable income (22% single) and your spouse makes $50,000 (22% again Single) then your joint bracket is $100,000 (22%) and it's impossible to ever go above that. Your marginal rate for joint can be equal to your separate Single brackets (if you make similar incomes) but it cannot ever go above that, at least at <$648k.

The opposite can happen, which is why people with disparate incomes benefit from joint. Say you made $100,000 and your spouse makes $0. You would be in the 24% bracket and your spouse would be in 0% if you did Single. But if you file joint, you're back down in 22% land. So it's like you can "move" your income off your stack onto your spouse's. So you move your 24% portion and some of your 22% portion down to your spouse's 10%, 12%, and 22%.

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mjacob t1_iy4p4ao wrote

You’re almost always better off with a filing status of married filing jointly, but without knowing your entire situation, none of us here can say definitively.

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Werewolfdad t1_iy4ne80 wrote

I think OP is confused and thinks "married filing jointly" and "claiming spouse as a dependent" are the same thing

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mudra311 OP t1_iy4y2u4 wrote

Not any more. That's been clarified.

You can claim a domestic partner as a dependent (which my SO was for a short time) but not a spouse.

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