[Nahla2016]

I have a friend who called me yesterday wondering if she should file taxes with her husband or not if she is just making $5000 a year. It is not self employment. I told her that she has to since both of them are making more than$20,000 a year and they are less than 65 years old. Am I right?

[Anonymous]

People mean different things by “file taxes with [their spouse]”. Some mean “should I file as married?” to which the answer is always “Yes, you have to show that you're married” (which I know that you know, but sometimes others don't know 🙂 ). Other times they mean “Should I file as married filing jointly or as married filing separately?” which is more complicated, but based on just the limited information shared here, I'd guess that they'd come out better as MFJ than as MFS, cause his tax rate would be a lot lower as MFJ presuming that he's made more than her, but you'd need a lot more information than that to know for absolutely certain that they're better as MFJ. Sometimes they mean “should I let my spouse have my dependency exemption or should I let my parent/sister/friend/someone else”, and then again it would require more information, but probably they need to have the exemptions on one spouse or the other or on a joint return, again would need more details to know exactly. Like I knew someone once that his child married right after college, so the year that his child married, he was eligible to claim his child as a dependent because his child has been a full-time student for the majority of the year and his child had lived with him the majority of the year and some other various factors, so even though the young couple was married, the father was eligible to claim the dependent. But, that's a unique situation.

So….my point is, her question could really be asking a few different things, with different answers. But in most situations, if she's made less than $5000, and presuming he's made more and is the one supporting the household, probably MFJ (which is probably what she means by “filing with her husband”) is the best plan. However, it's not required, at least not to my knowledge – I believe she could do MFS instead if she wanted to, or if there's extenuating circumstances (like he owes back taxes, or they're having trouble and she fears separation/divorce but isn't saying anything yet, etc.), but it may result in a higher tax expense for their household as a whole.

[Nahla2016]

@lilla she wants to file jointly. She was just shocked that the owe money to the IRS. So she was asking if she should have put her income if she was only making$5000. She told me that her daughter works and college and tax preparer told her that she doesn't need to file. So she was using her daughter's example to tell me I shouldn't have entered my income when filing jointly.

[Anonymous]

Ooooohhhh I completely misunderstood the question. Then yes, she has to list her income. I think technically you're supposed to list all income if you file, regardless of amount, including if you get paid $10 to speak at an event listing it as other income (since it's below $400), let alone $5000. It's just if you don't file at all, then you're below certain levels you don't have to file, but if you file (which she does if it's a joint return), then you have to list your income. You saved her from getting a notice, whether she appreciates it or not.

[Anonymous]

Nahla I come to you from the future. I have a policy of not answering tax questions over the phone or for friends/family in general. This is after a few go-rounds of people not remembering what I said, misinterpreting what I said, or conveniently leaving out information.

Besides, it's also true, you really can't answer tax questions without knowing you have the full picture of the client's financial situation.

[Missy]

Giving tax advice without knowing all the details is what leads a daughters tax preparer to say something that is likely taken out of context and misinterpreted. Yes it is likely taxable income whether it's better to file joint or separate depends on the situation but generally more favorable to file joint.

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[nadroj]

If you think you don't owe taxes, that's a great reason to file.

Refund. Cha-ching!

[Author]

Replies