very basic tax questions....

[dandeliongirl75]

Hi,

sorry about the basic level of all of this - I grew up in England where we did not file taxes ourselves until after I left the country 12 years ago...so taxes have been a weird mystery to me until this year. I am now trying to understand by reading a lot but would like to check what I have learned to make sure I have it right.....I appreciate any feedback:

I am recently separated from my husband - not legally yet so I am assuming that we will be filing "married filing singly"

Does anyone know if we get a legal separation if we can file as single? (I am concerned as he is a student he will be pretty upset if I want to itemize as he will then have to itemize and he will lose out as I am guessing he does not have much to deduct....though he left me so maybe I should not be worried but we are still friends and I do not want to screw him over...)

So, the ridiculously basic questions I have are:
(I know my numbers are a little off - I am using rounded numbers for simplicity)

I will get one exemption and a deduction (either standard or itemized) right as I get a personal exemption (even though I have no dependents)?

Both of these get taken off of my gross income before I start calculating tax?

So if I earn $48000 gross, I can take off $3900 for exemption and then say $6100 for the standard deduction so my taxable income would be  $48,000 - $3900 - $6100 = $38,000 right?

Then the first $8900 (ish) of this $38000 will be taxed at 10%
Then the income between $8900 and about $36000 will be taxed at 15%
The remainder will be taxed at 25%

That is my understanding of the basics - is that correct?

Then with regard to deductions - I have paid about $8000 this year in interest and property tax. So, if I just use that for a deductible (I know there are other things I can deduct but this is the thing that is easy to determine if I should file this way) I would use $8000 as a deductible number instead of the standard deductible....which would further reduce my taxable gross income by $2000 over the standard deductible?

Also, do the FICA payments that get taken out of my paycheck get taxed? Or are they taken off of my gross taxable income too?

I hope this makes sense....

Thanks for any help....

[Cheddar Stacker]

Most of what you said there is pretty accurate.

FICA payments aren't deducted/deductible, it's just a separate tax on the same income.

If you are legally married, you have to either file Married Filing Joint or Married Filing Separate. If you go MFS there are a few shitty restrictions. If you itemize, he has to. If you have student loan interest you can't deduct it. There are other limitations, but those are the two I always remember.

Itemized Deductions - You have the idea down, but you can also add any state income taxes paid, any real estate or personal property taxes paid, or any large sales taxes paid if they exceed state income taxes. You can also add any charitable contributions here, and a few other things.

File as fast as you can if your ex is the type that might try to screw you over. If you are the one that paid the mortgage and you have the right to deduct it, don't let him claim it first, or don't let him file first with the standard deduction as it might preclude you from taking itemized deductions.

[dandeliongirl75]

Thanks - good point on filing fast - I am pretty sure he would not screw me over - the house is completely in my name and I paid everything on it (long story)...plus he is really not the type to screw me over intentionally....also he is kind of slow in filing taxes usually....but  I will still get mine in as soon as possible....just in case things change....

I did just send him an email about the thing where we will both have to itemize....I really do not want to screw him if he will not reach the standard deduction and may offer to subsidize some of the difference as I think it really will be much better for me to file itemized.....

we need to get started on the divorce stuff - he is going to do that - maybe this will motivate him....

[chicagomeg]

Another new penalty for those MFS is that you also cannot qualify for an ACA premium tax credit. I don't know if that matters in your individual case, but wanted to put that information out there for others, as this is a new development & pretty meaningful for a lot of people.

Here's a good summary of the issue from Consumer Reports:
http://www.consumerreports.org/cro/news/2014/03/can-i-get-an-obamacare-subsidy-if-i-m-married-but-filing-separately/index.htm

[dandeliongirl75]

Thanks - it does not affect me currently....but good to know....yet another reason for getting the divorce figured out....

[Cpa Cat]

If things are amicable, most people choose to file Married Filing Joint.

If things are not amicable, it is often a better choice to do Married Filing Separately, despite the various restrictions and penalties.

[TomTX]

Run the numbers,  MFJ is likely to be cheaper.  But run it both ways in the tax program of your choice.

[Cpa Cat]

If you do decide to file MFJ, here are some things to keep in mind:

1. The lower earner tends to assume that the refund will be split 50/50, while the higher earner often feels entitled to a greater portion. The opposite is true if taxes are owed.

2. Generally speaking, a refund check cannot be direct deposited into an account unless it is a joint account. If you don't have a joint account, then you'll receive a paper check at whatever address is listed on the tax return. This is also the address that any notices will be sent to. The spouse at that address has a tendency not to inform their Ex about these things.

As such, I generally advise divorcing clients to discuss these things prior to filing and not to make any assumptions about what their spouse might be thinking.