When Married Filing Separately Will Save You Taxes – Presented by TheStreet + TurboTax

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~~~Video Transcript
Title: When Married Filing Separately Will Save You Taxes – Presented by TheStreet + TurboTax
– [Announcer] TurboTax helps you navigate the 2020 tax season.

– Sometimes filing separately will save a married couple on their taxes. Here to explain is Lisa Greene-Lewis, CPA and tax expert at TurboTax. Tell me, Lisa, I thought that married couples should file jointly, but maybe that’s not always the case.

– Generally, you should file jointly, ’cause you may see a lower tax rate and some bigger benefits like a bigger standard deduction, which if you’re married filing jointly is $24,400, but there are some reasons that someone may wanna file separately.

– What are some of the reasons that a married couple may file their taxes separately?

– One of the reasons is if you find that each of you has six-figure income and both of you generally make the same amount, it may be more beneficial for you to file separately tax-wise. And then a second reason, if you’re newly married and maybe you’ve found out that the person you married has some type of debt, you may wanna file separately, or if they have a self-employed business and you don’t wanna have that tax debt for the self-employed business, you may wanna file separately.

– And what does that mean for deductions?

– So when you file separately, there are some deductions that you may not be able to get even though you’re married. So when you file separately, like say, you or your spouse are going to college or taking one class, you can’t get the credit for education expenses because you have to be filing jointly in order to get that.

– And medical expenses matter too, right?

– Yeah, well, if you itemize, so if you’re filing separately and one spouse itemizes their deduction, the other spouse has to itemize as well. So you would split those expenses. Another reason for filing separately is if you’re going through divorce, it may be beneficial if the communication isn’t the best, because each person has to sign a tax return. So if you’re filing separately, you will be able to sign your own tax return and be responsible for what’s on that return.

– It’s a tense time for people divorcing already, and it’s also a tense time in terms of tax season, no reason to make it tenser, right?

– Right.

– And does TurboTax help a married couple come to an agreement how best to file?

– TurboTax will walk you through, it asks questions about you and your spouse, so it will help walk you through. And you can also use, we have TurboTax TaxCaster, where you can walk through the scenarios and put your information in as a married filing jointly couple or married filing separately.

– All right, well, thanks Lisa, and thank you for watching “The Street”.