Jane and Ben are married and usually file a joint return. They live in a separat
ID: 396529 • Letter: J
Question
Jane and Ben are married and usually file a joint return. They live in a separate property state (rather than a community property state). Jane is a partner in a law firm and typically generates income of $150,000. Ben is a grade school teacher with wage income of $75,000. The couple has investment income that is less than their standard deduction. With enactment of the deduction for qualified business income, the couple is wondering if they should continue of file as married filing jointly or instead use the married filing separately status. Why do they wonder this, and what advice would you offer them and why?
Explanation / Answer
In this scenario we can see that Jane's income is more than 50% of Ben's, Filing a joint return would lead to a lot of tax benefits as the tax would be deducted on them as One Joint Account. The IRS also recommennds married couples to file jointly. The couple can have advantages this way instead of opting for seperate returns, such as,
The differnce in their income wouldn't affect the tax benefits they get while filing joint returns, Hence I would recommend the couple to opt for joint return.
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