Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next
Author: malakito Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121105  
Subject: MFJ -> MFS due to Schd A medical expenses Date: 9/6/2001 3:50 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi,

I have filed MFJ for as long as we've been married but am considering filing MFS because it may save on federal taxes. The only reason it would save on federal taxes is due to Schedule A medical expenses that are not above the 7.5% floor in the MFJ scenario but probably are via the MFS scenario. (One of us brings in the majority of the income, the other has fairly high medical expenses this year.)

Since I am very unfamiliar with MFS, I have a few questions:

1. How must/may we allocate to the separate returns:
a. Income from spouse 1 job.
b. Interest/dividend income from joint taxable accounts.
c. Mortgage interest from jointly owed mortgage.
d. Property taxes from jointly owned home.
e. Charitable contributions made from joint accounts.
f. State tax withholding from previous year's (2000) MFJ filing.
g. Exemptions for husband, wife, children.
h. Child tax credits for children.

2. I am planning two $2K Roth IRA contributions this year. Would MFS preclude this somehow?

3. As far as the medical expenses go, it's only unreimbursed medical expenses, right? So our deductible plus the copays. Could medical expenses for our children be added to the MFS spouse with the medical expenses to increase the Schedule A deduction?

4. The value of even doing this would be roughly equal to the unreimbursed medical expenses times our effective rate, right?

5. If the spouse with the medical expenses has no appreciable income (say, perhaps half of the joint dividends), would the deduction result in a refund? I.e., if the only dollar amount of any question was, say, $3000 in unreimbursed medical expenses, would the Feds end up sending us a check for a few hundred dollars or would we get trapped somewhere by all of those "if less than zero, enter zero" phrases sprinkled throughout.

6. Any other gotchas?

I guess I should just stick an note in my "Taxes" file that I should consider it.

--malakito.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (12) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
TMFDeej's CAPS Blog

Activist Investors Unlocking Value at LSB Industries?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement