Posted by: goenkaraj January 26, 2012
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Okay here are the pros and cons (basically the cons of filing separate)
1. You mentioned you are both on H1b so I assume both of you work fulltime. If you pay someone to take care of the kid then you might not get the tax credit for dependent care. Depending on the expense it can range from $600 to $1,200
2. If you file separate and your kid is less than 13 years old, you cannot claim the child tax credit - another $1,000.
3. If one of you have higher state taxes deducted on W-2 and the other one doesn't, it may affect AMT tax and itemized deduction.
4. The only pro of filing separate is that some times people with higher income get phased out on many deductions due to higher Adjusted Gross Income.
Hope this helps.
Thanks,
Raj
1. You mentioned you are both on H1b so I assume both of you work fulltime. If you pay someone to take care of the kid then you might not get the tax credit for dependent care. Depending on the expense it can range from $600 to $1,200
2. If you file separate and your kid is less than 13 years old, you cannot claim the child tax credit - another $1,000.
3. If one of you have higher state taxes deducted on W-2 and the other one doesn't, it may affect AMT tax and itemized deduction.
4. The only pro of filing separate is that some times people with higher income get phased out on many deductions due to higher Adjusted Gross Income.
Hope this helps.
Thanks,
Raj