Tuesday, March 29, 2011

Filing Married Jointly or Separately?

Q.  I would like to take advantage of filing my wife and I separately between two states, as we each have homes in the two separate states, and we each would like to keep them as residences for as long as possible. What do you think? DP Colorado

A.  Filing Married Separately will likely put you both into the state's highest tax rates, and you will arrive at each state's highest brackets sooner rather than later. Then you have a challenge, depending upon which states you are considering, (and it can be a real headache) if one of them is a community property state and the other is not. I would suggest making an appointment with an income tax professional right after the filing season rush to do some serious tax planning for 2011. Depending on circumstances, you may or may not have a choice for 2010. If in doubt, put your tax returns on extension for 2010 until you can get this issue ironed out. Good luck!

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