Federal tax A B C 4 Betty, is a long-time client of yours and got married on 4/1
ID: 2338140 • Letter: F
Question
Federal tax A B C 4 Betty, is a long-time client of yours and got married on 4/1/2018 to Abe. For 2018 Abe earned "approximately" $250,000 from a self-employed business that Betty does not know much about. Betty earned $ 10,000 during the year. Unfortunately, Betty and Abe are having some problems and they are planning to divorce in 2019. In 2018, they are still living together. A- What are Betty & Abe's choices for filing status in 2018? B- Betty tells you she is very nervous because she thinks Abe may be involved with the wrong people" and not reporting all of his business income for tax purposes. What filing status would you recommend for Betty? Why? C - If Abe dies before 12/31/18, what is Betty's choices for filing status in 2018? D -What is Betty's filing status in 2019 if she remains unmarried in 2019?Explanation / Answer
A)Married Filing Jointly - If Betty and Abe can file the return under Married Filing Jointly after taking consent of each other. If they file under Married Filing Jointly they will get more standard deduction and other tax benefits.
B)Married Filing Separately - We would recommend Betty to File return under Married Filing Separately if she thinks Abe may be involved with the wrong people and not reporting all of his business income for tax purposes. In case of any isues with income it can be avoided.
C)Married Filing Jointly- Even if Abe dies 12/13/2018, IRS still allows to Married Filing Jointly so that spouse doesnt get more burden of taxes for that year.
D)Single- If she is unmarried in 2019, she has to file its as single.
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