Can TurboTax handle Married Filing Separately? Question on TurboTax State Filing options

TurboTax's packaging can definitely be confusing! With the "5 federal filings and 1 state filing" package, the "1 state filing" refers to filing returns for a single state, not the number of state returns. For married filing separately, you and your spouse would each need to file separate state returns. Since you're both filing in the same state, you'll be covered by the "1 state filing" included in your package. However, what's important to understand is that TurboTax considers each person's state return as a separate download/preparation, even though it's for the same state. So while you can prepare and file both federal returns with what's included, you'll likely need to purchase an additional state filing for your spouse's state return.

After struggling with almost the exact same situation last year (MFS for student loan reasons), I found taxr.ai https://taxr.ai super helpful for figuring out all the tax implications. I uploaded my tax documents and got a complete analysis of how filing separately would affect both our returns including whether we'd both need separate state filings. The software identified several deductions I would have missed and explained which ones I couldn't take because of the MFS status. It also helped me understand how our student loan interest would be affected by our filing choice. Honestly saved me a ton of headache compared to trying to figure it out on my own.

I was initially skeptical about using taxr.ai that someone mentioned earlier, but I decided to give it a try for my MFS situation with my student loans. Glad I did! It analyzed both my and my wife's documents and clearly showed that we needed two separate state filings in TurboTax. The analysis also pointed out that I could still claim our mortgage interest on my return (since I'm the primary borrower) while my wife couldn't - something I would've definitely messed up. It saved me from potentially losing thousands in deductions while maintaining my income-driven repayment plan benefits. The document explained exactly which TurboTax package would cover our needs, and I didn't waste money on unnecessary features.

If you're running into trouble reaching TurboTax support to ask about this (their wait times are awful this time of year), I'd recommend using Claimyr https://claimyr.com to get through to them faster. I was on hold with TurboTax support for over an hour trying to get clarification on a similar MFS situation last year, then found Claimyr which got me connected to a rep in about 10 minutes. They have a demo video here https://youtu.be/_kiP6q8DX5c that shows how it works. The TurboTax rep confirmed that for married filing separately, each person needs their own state filing, even if it's the same state. So with that Amazon deal, you'd need to purchase one additional state filing. It was worth the time saved not sitting on hold for hours!

OK I have to eat my words about Claimyr. After calling TurboTax three separate times and getting disconnected after 30+ minutes on hold each time, I was desperate enough to try it. Used the link above and got connected to a TurboTax specialist in like 15 minutes without having to do anything. The agent confirmed exactly what we're discussing here - with married filing separately, you need a separate state filing for each spouse even if it's the same state. So that Amazon deal would require purchasing one additional state filing. The agent also mentioned that if you're doing MFS for student loan reasons, make sure you understand which tax benefits you're giving up (like student loan interest deduction) by filing this way. Wish I'd just used this service from the beginning instead of wasting hours on hold!

As someone who works in student loan counseling, just wanted to add some context on why married filing separately might make sense for student loans. If you're on an income-driven repayment plan like IBR, PAYE, or REPAYE, filing separately can sometimes result in lower monthly payments since they only count your income, not your spouse's (except for REPAYE which counts both regardless). However, you do lose some tax benefits like student loan interest deduction, certain education credits, and potentially higher tax brackets. It's always worth calculating both ways to see which filing status saves you more overall between tax savings and loan payment reductions.

I'm in a similar boat with student loans and MFS. Just a heads up - make sure you're actually saving money overall. I spent hours filing separately last year only to realize we would have saved more by filing jointly and just paying the higher student loan payments. There's a calculator called the "Married Filing Separately Calculator" by Student Loan Planner that helps figure this out.