Tax Question

[Brentastic]

Is it better to file jointly or separately? In other words, which method will net us the most return? We both make similar incomes and we had our first child this summer (July 2008). I (and I think my wife) both claim zero throughout the year as well. Any guidance would be much appreciated.

[wildcat2334]

the best return is to leave your wife immediately....................................

 

 

married joint is better for most people - unless you have a complicated situation ie - alot of medical, itemized, etc.

 

you will lose out on some credits, child, lifetime learning, etc -

[Puddy]

It probably won't make a difference.

[cre8tiff]

It probably won't make a difference.

 

Newt?

[Brentastic]

It probably won't make a difference.

Some help you are

[rocknrobn26]

Year's ago I used to compare both. It never came close, so I always felt Jointly was better.

 

EF:

If you get Turbo Tax you can run both scenarios, but I'd be surprised if Single is better.

Edited January 6, 2009 by rocknrobn26

[Scooby]

it's almost always better to file MFJ, many reasons, like you can't contribute to a Roth ira (that's a biggie), you can't claim child care tax credit (does your little one attend daycare?), can't write off college loans, both spouses must itemize, the list goes on & on.....

 

-separately is good for very few taxpayers. I have a friend who has filed separately because his wife prior to their marriage, owed back taxes....now they're getting divorce, go figure!

[gilthorp]

Sorry Brent, never filed any other way but MFJ since we've been hitched.

[Brentastic]

Sorry Brent, never filed any other way but MFJ since we've been hitched.

No problem - it seems like jointly is the way to go.

 

On a sidenote, how do I maximize my return and NOT rely on H&R Block (or another)? For instance, I didn't realize we could deduct our student loan payments - and of course daycare would be hugh at $200 per week. Any tips (or accountants that want to do my taxes) would be much appreciated.

[Puddy]

No problem - it seems like jointly is the way to go.

 

On a sidenote, how do I maximize my return and NOT rely on H&R Block (or another)? For instance, I didn't realize we could deduct our student loan payments - and of course daycare would be hugh at $200 per week. Any tips (or accountants that want to do my taxes) would be much appreciated.

 

Shouldn't make any difference...

[Puddy]

I know there are ways to file free online. The IRS link is below but there are income eligibility requirements. Turbo Tax also offers a free online service as well.

 

If not eligible, just pick up one of the software packages (TaxCut or TurboTax) and do it yourself. You won't have a problem doing them yourself.

 

 

Free file with the IRS

[Brentastic]

I know there are ways to file free online. The IRS link is below but there are income eligibility requirements. Turbo Tax also offers a free online service as well.

 

If not eligible, just pick up one of the software packages (TaxCut or TurboTax) and do it yourself. You won't have a problem doing them yourself.

 

 

Free file with the IRS

So is turbotax as easy as inputing whatever information they ask? If so, do you know the cost of said software (my google is broke )

[Puddy]

So is turbotax as easy as inputing whatever information they ask? If so, do you know the cost of said software (my google is broke )

I think it runs about $45. That includes free efile as well.

 

I think TaxCut is somewhat less expensive. If you only plan on doing your return, it may be cheaper to use a preparation service online.

 

Here is TaxCut's site. If your return is really simple, it looks like you can use the free service regardless of income. Look around their FAQ's.

 

And yeah, it's easy as inputting what they ask.

[Brentastic]

I think it runs about $45. That includes free efile as well.

 

I think TaxCut is somewhat less expensive. If you only plan on doing your return, it may be cheaper to use a preparation service online.

 

Here is TaxCut's site. If your return is really simple, it looks like you can use the free service regardless of income. Look around their FAQ's.

 

And yeah, it's easy as inputting what they ask.

I'm not sure what classifies as 'simple' but I have not sold any stock nor do I own any property. Basically, the only thing I'm looking to maximize is our student loans and daycare expense.

[i_am_the_swammi]

No problem - it seems like jointly is the way to go.

 

On a sidenote, how do I maximize my return and NOT rely on H&R Block (or another)? For instance, I didn't realize we could deduct our student loan payments - and of course daycare would be hugh at $200 per week. Any tips (or accountants that want to do my taxes) would be much appreciated.

 

For 2008, the most you can itemize for daycare expense is $3000.

 

However, if your employer offers a Dependent Care Reimbursement Plan, you can use up to $5000 pretax dollars to pay for childcare. This is definitely he way to go. No net cost to your employer to set this up as a benefit. While teh employer does pay a fee to a company to administer the program, the cost is made up in the fact they the employer reduces the amount they have to pay in taxes to cover you as an employee (Social Security tax), since your taxable income is reduced.

 

I just talked my employer into offering this plan for 2009....showed them the cost-benefit analysis, and how our employees would net about $400 more per year in their paychecks at no cost to the company.

[Brentastic]

For 2008, the most you can itemize for daycare expense is $3000.

 

However, if your employer offers a Dependent Care Reimbursement Plan, you can use up to $5000 pretax dollars to pay for childcare. This is definitely he way to go. No net cost to your employer to set this up as a benefit. While teh employer does pay a fee to a company to administer the program, the cost is made up in the fact they the employer reduces the amount they have to pay in taxes to cover you as an employee (Social Security tax), since your taxable income is reduced.

 

I just talked my employer into offering this plan for 2009....showed them the cost-benefit analysis, and how our employees would net about $400 more per year in their paychecks at no cost to the company.

Yes, we are doing this now for 2009 as well. Thanks for the input.

[cdrudge]

 

I'm not sure what classifies as 'simple' but I have not sold any stock nor do I own any property. Basically, the only thing I'm looking to maximize is our student loans and daycare expense.

For Turbotax, the free version is very no frills and doesn't have many options that many people are going to qualify for. Basic is ok if you need some guidance on doing your taxes, but doesn't include the deductions for student loans, child care, itemizing, etc. For that, you'll need the deluxe. If you are self employeed, have investments/real estate income, or company they have additional editions for those scenarios. For most people, the deluxe edition is likely what you need.

[Brentastic]

For Turbotax, the free version is very no frills and doesn't have many options that many people are going to qualify for. Basic is ok if you need some guidance on doing your taxes, but doesn't include the deductions for student loans, child care, itemizing, etc. For that, you'll need the deluxe. If you are self employeed, have investments/real estate income, or company they have additional editions for those scenarios. For most people, the deluxe edition is likely what you need.

Thanks for your input