filing separately not the way to go
I am disabled and receive Social Security disability benefits. My
wife works and is the main wage contributor. If we file separate
tax returns, my Social Security is not taxable since it is the only
income I have, but if we file a joint return, 70 percent of my benefits
are taxable. My question is this: If I do not file a return or if
we file separately, can my wife claim me as a dependent on her return
or take an exemption for me?
I don't think you're clear on how Social Security benefits are taxed,
so I'll answer that first before we get to the exemption question.
Benefits are taxable when one-half of your benefits plus all your
other income (including tax-exempt interest and dividends) exceed
a base amount. The base amount depends on your filing status.
For 2005 the base amounts are as follows:
- $25,000 if you are single, head of household or qualifying widow(er),
- $25,000 if you are married filing separately and lived apart
from your spouse for all of 2005,
- $32,000 if you are married filing jointly, or
- $0 if you are married filing separately and lived with your
spouse at any time during 2005.
So, if you lived with your wife in 2005, which it
sounds like you did, you won't avoid tax on your benefits -- without
meeting certain other thresholds -- by filing a separate return.
To avoid tax on part of your benefits, your wife must not itemize
her deductions on a separate return so that you are allowed one-half
of the standard deduction that a married couple filing jointly would
be entitled to claim. In 2005, this amount is $5,000. Hence, if
your wife does not itemize, you can reduce your taxable benefits
by $5,000. Depending on the amount of benefits you received, you
might avoid tax. However, if you're married filing separately, you
lived with your wife and your benefits exceeded $3,200 in 2005,
you would be required to file a tax return according to Publication
If your wife files a separate return, she can claim
the exemption for you only if you had no gross income, are not filing
a return and are not the dependent of another taxpayer. Hence, your
wife would not be entitled to an exemption for you.
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