Recommended Tax Filing Status For The Couple Should Be Divorced Filing
The recommended tax filing status for the couple should be married filing jointly.
A1. Recommended Tax Filing Status Explained
The recommended tax filing status for this couple is married filing jointly. . Since the couple has three children they will qualify for three dependent exemptions and two personal exemptions (Hoffman, Maloney, Raabe, Young, 2013). All three children will meet the rules for claiming them as a dependent since the first child is 18 and a student, the second is a high school junior and the third is a 10 year old. The rule is that he child must be under 19 or attending college and under the age of 24 (Hofman et al. 2013). The couple will not be allowed to claim Spouse B’s mother as a dependent since they did not provide over half of her support for the year (Hofman et al. 2013). She received $9,000 in Social Security for the year in which she gave the couple $7,920.00 of it and the support the couple gave to her was calculated at $7,000.00 for the year. Under law they must provide over half of her support for the year (Hofman et al. 2013).
A2a. Taxable and Non-Taxable Income
The IRS defines income as “all income from whatever source derived” (Hofman et al. 2013).
For this couple the taxable income is:
Spouse A has income from a partnership of $142,000.
Spouse A has a W-2 for $2,000.
Spouse B has income of $88,000 for a controller position.
Spouse A receives dividends from company E
Spouse B has a…