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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Re: Marriage Penalty Date: 11/8/1999 11:23 PM
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<<In this instance, FS 3 allows for a lower tax bracket especially if the two incomes are widely disparate. One
spouse will be taxed in one bracket while the other spouse will be taxed in, usually, a lower bracket.

Actually MFJ may be to your advantage with disparate incomes, because when incomes are combined the
deduction is taken off the top and thus reduces income in the highest tax bracket. But if you file MFS 1/2 of
your deduction will go to low-taxed income.>>

I realize that this is the common thinking...but it's just not true.

First, if you live in a community property state, the married-separate status is virtually worthless. You are required to split the community income down the middle, with each spouse reporting his/her shares. So in effect, there will be no "lower" bracket for either of them.

Even in separate property states, there can still be what is called joint or community income, which would then follow the same rules.

And even if you are in a completely separate property state, many of the hazards of using the married-separate filing status are not overcome by the potential tax savings. In reality, it's just not there.

About the only people who use the married separate status are those in very specific and unique circumstances, or simply don't understand how the law really works.

Again, I explain this in much more detail in my series of articles in the Taxes FAQ area. You might want to take the time to read them.

TMF Taxes
Roy
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