Discussion:Married Filing Separte.

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Discussion Forum Index --> Basic Tax Questions --> Married Filing Separte.

Discussion Forum Index --> Tax Questions --> Married Filing Separte.

Taxes gone wild (talk|edits) said:

22 February 2009
I have not in the past preformed this scenario very often except for those who are truly separted and all expenses are split. Just a basic question. Married couple living together, Hsuband makes substancially more then spouse, combined income about 155,000,2 small children own a home with mortgage , taxes , etc. the usual. Home in both names, so is mortgage. When check ruling for the MFS/MFJ scenario I am unable to find a guideline as to the correct way to split every thing. I would have thought that the children are split,giving most dependants to the taxpayer tht benefits the most and the expenses are split, Can the expenses be realocated to best suit the taxpapers and reduce their liability. Example: one spouse takes the kids, the full deduction of home and medical expenses as pertaining to those dependents,. Interest split etc. Of course,anything thatis distinctly their own would of course remain that way with that MFS return. When doing this scenario in the past I have always split those expenses that had both taxpayer names on them. Please advise, client is very insistant on seeing comparison.

When I split all equally the better result is MFJ. If I reallocate expenses etc . MFS give them back an additional $1600.00

Irsfixer (talk|edits) said:

22 February 2009
Blood is shooting from my eyes. But it is early. It is Sunday.

Death&Taxes (talk|edits) said:

22 February 2009
Before wasting lots of time, if you are using a MFJ/MFS comparison in your software, make sure it considers AMT. Generally AMT upsets the apple cart in these scenarios.

Each spouse would be entitled to the deductions they pay from their own separate account, but if paid from a joint account, and in a non-community property state such as NJ where you practice, you must rebut the presumption of Rev Ruling 59-66:

"Where the husband and wife maintain a joint checking account in which each apparently has an identical interest, there is a presumption that the expenses paid from such account for medical care are paid equally by each of the two parties. This presumption may be rebutted by competent evidence to the contrary and one of the parties may claim and be allowed a deduction for the expenses paid for the medical care of that party, his or her spouse or a person qualifying as that party's dependent if such expenses can be shown to have been paid by that party alone."

The argument for claiming deduction in relation to income put into the account would run something like A made 150K and B made 50K so A must have paid for 75% of the expense, but I believe the counter argument would run that when A deposited that 150K into a joint account, a gift was made to B and the funds equally belong to both.

Taxes gone wild (talk|edits) said:

22 February 2009
Thank-you !

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