I've moved to the US from Canada and am filing a 1040 for the first time (last year I filed a 1040NR-EZ).
I'm married but my wife has no income, so I was going to do a joint filing so I could add her as an exemption and thus reduce my tax payable. However after starting to fill in the form it looks to me like adding her as an exemption has no effect on my overall tax amount because my taxable income from line 43 is more than $100,000 and thus I must use the tax computation worksheet and not the tax table.
My taxable income on line 43 is over $100,000 regardless of whether I add my wife as an exemption or not - adding her increases the amount on line 42, but is not enough to make line 43 fall below $100,000/
Have I understood things currently and there's therefore no benefit in me doing a joint return and claiming her as an exemption?
Thanks
Does adding a spouse as an exemption have no effect for me?
Moderator: Mark T Serbinski CA CPA
Hi,
When you file jointly, your wife will automatically be an exemption.
For example, when you do "married filing jointly" with no dependents, you will automatically have 2 exemptions - yourself and your spouse.
If you do "married filing separately" you have only yourself as an exemption - but you could add your spouse if your spouse is dependent on you. In almost all cases, married filing jointly is the best choice to minimize the tax bill.
When you file jointly, your wife will automatically be an exemption.
For example, when you do "married filing jointly" with no dependents, you will automatically have 2 exemptions - yourself and your spouse.
If you do "married filing separately" you have only yourself as an exemption - but you could add your spouse if your spouse is dependent on you. In almost all cases, married filing jointly is the best choice to minimize the tax bill.
@ Thanks MGeorge, but that didn't answer my actual question. I'm saying I can see no change in tax due if adding her as an exception, and my question is that correct in my situation (where I give details of line 43) and therefore is there no point in even her filing separately or jointly.
@nelsona, I don't understand what you mean? See how/where? Thanks
@nelsona, I don't understand what you mean? See how/where? Thanks
This is not a forum devoted to addressing how to mechanically do your taxes. You should be using software.
When you file jointly, you get 2 exemptions.
Line 42 instructs you to take $3800, so line 43 is reduced by $3800 for each exemption, including yours, your wife's, andf any kiddies. whether your tax is calculated using the tables, or whether it is by formula, $3800 less taxable income produces less tax. Period. Even for the IRS. Who cares whther its from the table or not?
The phase-out for losing exemptions for joint filers in the the $300K range.
So, again, you should be using software, and if you are still having a problem, contact the vendors.
When you file jointly, you get 2 exemptions.
Line 42 instructs you to take $3800, so line 43 is reduced by $3800 for each exemption, including yours, your wife's, andf any kiddies. whether your tax is calculated using the tables, or whether it is by formula, $3800 less taxable income produces less tax. Period. Even for the IRS. Who cares whther its from the table or not?
The phase-out for losing exemptions for joint filers in the the $300K range.
So, again, you should be using software, and if you are still having a problem, contact the vendors.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
It does make a difference because the rate in the tables changes in fine grain increments but the rate in the worksheet changes in coarse increments.
If the amount showing on line 43 is over $100,000 then the tax worksheet on page 91 is used. If the amount showing on line 43 is less than $100,000 then the tax tables are used.
Look at the tax computational worksheet on page 91 of the 1040 instruction booklet - you will se for example that if the income is over $100,00 but less than $178,650 then the multiplication and subtract amount is the.
This is the whole crux of my point - if the amount on line 43 falls within this range, regardless of if you have previously subtracted 0 or N exceptions from it, then how can it make a difference?
On the other hand suppose subtracting an extra $3800 made line 43 fall below $100,000, then the tax computation worksheet on page 91 would not be used. Instead the tax tables would be used instead.
Some examples:
1) line 43 is $99,999. Result of using tax table: the amounts are DIFFERENT if filing jointly or filing separately (see page 90)
2) Line 43 is $100,000. Result of using tax computation worksheet: there is NO DIFFERENCE listed for filing jointly or separately. (see page 91)
3) line 43 is $178,549. Result of using tax computation worksheet: there is no difference listed for fling jointly or separately (see page 91). Also the result of the computation is the same as for case 2 above.
If the amount showing on line 43 is over $100,000 then the tax worksheet on page 91 is used. If the amount showing on line 43 is less than $100,000 then the tax tables are used.
Look at the tax computational worksheet on page 91 of the 1040 instruction booklet - you will se for example that if the income is over $100,00 but less than $178,650 then the multiplication and subtract amount is the.
This is the whole crux of my point - if the amount on line 43 falls within this range, regardless of if you have previously subtracted 0 or N exceptions from it, then how can it make a difference?
On the other hand suppose subtracting an extra $3800 made line 43 fall below $100,000, then the tax computation worksheet on page 91 would not be used. Instead the tax tables would be used instead.
Some examples:
1) line 43 is $99,999. Result of using tax table: the amounts are DIFFERENT if filing jointly or filing separately (see page 90)
2) Line 43 is $100,000. Result of using tax computation worksheet: there is NO DIFFERENCE listed for filing jointly or separately. (see page 91)
3) line 43 is $178,549. Result of using tax computation worksheet: there is no difference listed for fling jointly or separately (see page 91). Also the result of the computation is the same as for case 2 above.