How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Lane Your Own Question

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3158
Experience:  Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I need to decide how to file my taxes for 2013. I make ~230k

Resolved Question:

I need to decide how to file my taxes for 2013. I make ~230k with the suual writeoffs for a home. My wife makes ~30k but she does not withhold anything. So, under 2012 tax law, if I file married - separate, I owe ~5k, and if I file married - joint, I pay ~5k. Does anyting change for 2013 which would favor one filing status over another? I would prefer to file married - separate, since I am going through a dovorce and it won't be final until 2014. However, if it is going to cost me thousands of dollars to do this, I want to file jointly. I'm just not sure if the 2013 changes will have that drastic of an affect and wanted to check with someone who has the answer.
Submitted: 5 months ago.
Category: Tax
Expert:  Lane replied 5 months ago.

Lane :

Hi ... honestly about the only reason to file separately IS the one you gave (keeping things separate), but financially married filing jointly almost always makes more sense ... For example, for 2013 the personal exemption that everyone gets is 3900 (you'll see two of them on the joint return) but they are phased out at certain income levels; for married filing jointly phaseout begins at 300,000 ... but for separately they're phased out a 150,000 ... also the standard deduction is $12,400 for married filing jointly and only $6,200 for filing separately (although that may not make a different as you probably itemize and your itemized deduction will be more than that ... the factor that will make the MOST difference is the tax bracket for filing married jointly as opposed to separately (for jointly the brackets tax much higher levels of income a t lower rates: See this:

Lane :

Here's married separately:


Married Filing Separately Filing Status


[Tax Rate Schedule Y-2, Internal Revenue Code section 1(d)]



  • 10% on taxable income from $0 to $8,925, plus

  • 15% on taxable income over $8,925 to $36,250, plus

  • 25% on taxable income over $36,250 to $73,200, plus

  • 28% on taxable income over $73,200 to $111,525, plus

  • 33% on taxable income over $111,525 to $199,175, plus

  • 35% on taxable income over $199,175 to $225,000, plus

  • 39.6% on taxable income over $225,000.

Lane :

And here's married filing jointly:


Married Filing Jointly or Qualifying Widow(er) Filing Status


[Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]



  • 10% on taxable income from $0 to $17,850, plus

  • 15% on taxable income over $17,850 to $72,500, plus

  • 25% on taxable income over $72,500 to $146,400, plus

  • 28% on taxable income over $146,400 to $223,050, plus

  • 33% on taxable income over $223,050 to $398,350, plus

  • 35% on taxable income over $398,350 to $450,000, plus

  • 39.6% on taxable income over $450,000.

Lane :

look at the 25% and 28% tax bracket for both

Lane :

Nothing is really changing for 2013 other than the exemptions goin up to 3950

Lane :

And here's a really great way to think through the differences (from turbotax):

Lane :

When filing jointly, your tax return reports a single taxable income number that reflects your earnings, as well as your spouse’s. You then calculate the tax you owe using the married filing jointly tax brackets. There are six brackets—each of which imposes a different tax rate on specific portions of your taxable income. And as your taxable income progresses through each tax bracket, the tax rates increase.


The benefit of filing jointly over separately is that each tax bracket covers a wider range of taxable income than the married filing separately brackets do. Essentially, this means that more of your joint income is subject to lower rates of tax, which many times results in lower tax bill in comparison to calculating separate tax bills on the same earnings. And the larger the difference in the income that you and your spouse each earn, the more tax you will save by filing jointly.


Filing a joint return can reduce your taxes even more by itemizing deductions and taking all available tax credits that you and your spouse are eligible for. This is because when you file a separate return, the IRS places significant limitations on your ability to itemize deductions and to take tax credits – regardless of the fact that you and your spouse would otherwise qualify if filing a joint return instead. One drawback of filing a joint return is that you and your spouse are separately responsible for all tax—not just the tax that relates to your own earnings.


To illustrate, suppose you earn $50,000 per year and your spouse earns $100,000. Although you earn one-third of the income, you are solely responsible for the tax that is due on $150,000 if your spouse is unable to make payment. In other words, the IRS will not allocate an income tax debt between spouses who file joint returns. Under very limited circumstances, however, the IRS can grant various types of relief that either eliminates the joint liability or reduces the amount of tax you are responsible for.

Lane :

Make sense?

Lane :

I see that you're standing by (according to MY screen) Questions? ... Sorry for the data dump, just wanted to get the foundation out there (costs of married filing separately)

Lane :

Are you with me?

Lane :

I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here) ... Please let me know if you have any questions at all

Lane :

I'll be watching for you in Q&A...

Lane :

Let me know...

Lane :

Lane

Expert:  Lane replied 5 months ago.

Hi Joe,

 

Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.

 

But if you have any questions at all, please let me know,

 

Lane

 

Customer: replied 5 months ago.


Thanks for your input, Lane. It was enlightening. I appreciate it!

Expert:  Lane replied 5 months ago.

You're very welcome ...

Let me know if I can help further.

Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3158
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Customer: replied 5 months ago.

Hi Lane,


 


I'm remodeling my house that was a rental for seven months this year. It's vacant now and won't be completed until the end of the year. I am spending way more in remodling expenses than I collected in rent. Is there any way to write off these expenses?


 


Thanks


 


Joe,

Expert:  Lane replied 5 months ago.


Hi,

IF you don't mind, I'd like to ask if we can handle separate questions separately.

I only get credit when you rate one ... if I keep answering on the same questions without you either rating on the first one first, OR asking it as a separate questions, the I only get credited on time.

(Don't LOVE that part of the system myself)




But for now, lets go ahead and deal with the second one here:

On the rental. you can use schedule E to write off repairs and maintenance ...

and then the actual improvements to the structure itself? You'll get the benefit of that by it increasing the cost basis when you sell.



SO, basically, the IMMEDIATE gratification comes when you do regular repairs, (replacing doorknobs, repairing a cabinet or counter top, painting, and all the other regular day to day expenses, advertising driving back and forth to the property, etc.

But when you actually make an improvement like NEW cabinets, new deck, adding TO the property in some way ... that increases your basis in the property, so you'll pay less in capital gains tax when you sell it.




Here's a pretty good listing of the two:


Repairs & Maintenance:

refinishing a wood floor
repainting a room
repairing a roof
repairing existing plumbing
repairing existing appliances
replacing a doorknob
replacing a window
replacing a broken smoke detector
replacing rotted floorboards
replacing cracked floor tiles


Improvements:

adding an addition
adding central air conditioning
installing a security system
installing brand new carpet
replacing an entire roof
replacing all existing plumbing
replacing all existing electric
renovating a kitchen
replacing all windows


Hope this helps

Lane

Positive Feedback is appreciated. That's how I get credit for the work.
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3158
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Lane replied 5 months ago.

... Appreciate the rating Joe!

If you yo work with ME again,mask your question here:

http://www.justanswer.com/profile.aspx?PF=1929974&FID=20

Thanks again,

Lane


JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    566
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    566
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3046
    10+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3103
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    CPA, CMA, CFE

    Satisfied Customers:

    3257
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2679
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2219
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.