Quote:
Originally Posted by mikey2222  What is the name of your state? California
My wife and I always file jointly, but t
last year I had a huge increase in salary and hers remained the same. When I did the taxes, we took a huge hit due to the increase. Would it be beneficial for both of us to file singly, and are there any pitfalls or ramifications to doing so?
Thanks. |
Yes, there are huge pitfalls, particularly when incomes are unequal. Number one, its tax fraud to file singly, you would have to file "married filing separately". YOUR income would take an even bigger hit doing that, because much more of your income would fall in higher tax brackets.
On top of that, if you have any children, you would lose daycare credits and education credits. You would also have to both itemize if one of you itemizes, which can also be costly.
All in all, its probably a bad idea. However, you can cetainly run the numbers to see how it turns out.
03-20-2008, 05:40 PM
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