Bonnie and Jake (age 35 and 36, respectively) are married with no dependents and
ID: 2455618 • Letter: B
Question
Bonnie and Jake (age 35 and 36, respectively) are married with no dependents and live in Montana (not a community property state). Because Jake has large medical expenses, they seek your advice about filing separately to save taxes. Their incom and expenses for 2015 as follows: Bonnie's salary $42,000, Jake's salary $26,000, Interest income (joint) $1,500, Rental loss from activity managed rental property (23,000), Jake's reimbursed medical expenses $8,500, All other itemized deductions: Bonnie $9,000, Jake $3,400. Determine whether Bonnie and Jake should file jointly or separately.
Explanation / Answer
Jointly Return Bonnie Jake Joint Amount($) Amount($) Amount($) Salary 42000 26000 68000 Interest 1500 Rental Loss -23000 Total Income 46500 Itemized deduction 9000 3400 12400 Standard deduction 12600 Taxable Income 33900 Tax 4162.35 Seperatly Return Bonnie Jake Amount($) Amount($) Salary 42000 26000 Interest 750 750 Rental Loss -11500 -11500 Total Income 31250 15250 Itemized deduction 9000 3400 Standard deduction 6300 6300 Medical expenses 8500 7.5% of medical expenses 2343.75 Allowed medical expenses 6156.25 Taxable Income 16093.75 8950 Tax 1952.6625 895 It would be preferably to file seperately