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wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience:  I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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I am married and am embarking on a non paid internship starting

Resolved Question:

I am married and am embarking on a non paid internship starting January 1st, I plan on filing jointly with my husband for 2012, so far we have always filed separately. From what I understand although I am not listed as a dependent per say my husband will receive a tax break for carrying the household expenses.

My question is: A. What is the most amount I can earn and STILL give him the tax break as though I was a dependent (as I still can get freelance work if I want to), and B. What am I considered or listed as if I am not considered a dependent? Does he just list a different number of allowances so he is allowed more out of each check every month? His salary is around 110K a year plus bonuses. And to further complicate things I would be paid as an independent contractor so my W2's come from a few different sources..not sure if that matters but it might?
Submitted: 2 years ago.
Category: Tax
Expert:  wm030303 replied 2 years ago.

wm030303 :

Hello and welcome to Just Answer my name is XXXXX XXXXX can not claim you as a dependent because you are married so you need to file as married filing jointly or married filing seperately. You would be considered Spouse on the tax return and your husband is considered Taxpayer. Both of you filing jointly would get an exemption (two exemptions instead of one) and an increased standard deduction. You would combine your incomes and expenses on the tax return.

wm030303 :

Your husband could claim 2 exemptions on his withholding allowances at work but I think it would be best for him to claim 0=zero exemptions because you two are now combining your incomes and may be in a higher tax bracket.

Customer:

Okay great, I did read that so I appreciate the confirmation. What I am trying to figure out is how much I can make? We are trying to figure out what would be more profitable, if I work and only make 12K it might be better not to have that extra income. He read somewhere that I could only make 1,500.00 for the entire year and if I made over that amount he wouldn't be able to claim more allowances.

wm030303 :

As far as you being an independent contractor I would be concerned if the person you work for will be taking out for income and social security and medicare taxes. If not they should report your income to you and the IRS on a 1099 misc form (if you earn $600 or more). You will be responsible for paying your own SS and Medicare tax on this income.

Customer:

I do receive 1099's for my work yes.

wm030303 :

If you earn $12,000 as an independent contractor you will also be able to take deductions for any related business expenses and reduce this income by the allowable expenses.

Customer:

And I don't believe they take anything out. Basically he thinks we will be better off if I don't work and he can claim more allowances. So do you know the amount I can make and safely have him claim me as an allowance? I gave 12k as an example but I might make less. I am pretty sure there is an amount I can't go over but don't know what that is.

Customer:

He read somewhere it was 1,500.

wm030303 :

If you earn $1500 or less and he also earns $1500 or less the he is allowed to take an extra exemption allowance

wm030303 :

his $1500 or less would be from a second job

wm030303 :

As a married couple you would be much better claiming 0 exemptions and then determine whether you need to make adjustments next year.

wm030303 :

If he claims 1 or 2 exemptions and you don't have enough deductions you may end up with a large tax liability.

Customer:

I am not sure I understand the second job significance. He would prefer to have me work less and take the allowances rather than wait. So to clarify you are saying 1,500 is the cap I can make for him to claim another allowance?

Customer:

Even if I only earn 1,500?

wm030303 :

He could claim two exemptions if you earn $1500 or less and he could claim 2 exemptions just because you are married filing jointly. I'm just saying you would be better off if he just claims 0 or 1 exemptions.

wm030303 :

He should be okay if he claims the 2 exemptions and needs less tax withheld from his pay to meet the living expenses.

Customer:

Okay. I was looking for the number I could make so thank you. If I make over that amount it would be best for him to claim zero, I see. Thank you.

Customer:

One more thing, so If I make a small amount and he doesn't take the allowances up front he could still potentially get a tax break even if I am over 1,500?

wm030303 :

Your welcome and if your satisfied please press the green accept button.

Customer:

Almost there :)

Customer:

One more thing, so If I make a small amount and he doesn't take the allowances up front he could still potentially get a tax break even if I am over 1,500?

wm030303 :

We're relying on the current tax law as our guide, unfortunately we do not know what the tax law will be in 2012 yet.

Customer:

What about based on this years tax law?

wm030303 :

He should be ok two take 2 exemptions and you earn a little over $1500

Customer:

Okay thanks!

wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience: I am both a CPA and EA with over 30 years of experience in solving tax related issues.
wm030303 and 8 other Tax Specialists are ready to help you

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