Should we file MFJ vs. MFS when working in different states with different tax rates?

Filing MFJ (Married Filing Jointly) is usually more beneficial than MFS for most couples, even with different state situations. Here's why: MFJ typically provides better tax brackets, higher deduction thresholds, and access to more credits that aren't available with MFS. With MFS, you both must either take standard deduction or both itemize - you can't mix and match. For your state tax situation - even when filing MFJ federally, most states with different residency situations allow you to file separate state returns reflecting your individual state tax obligations. So you could file MFJ federally while your wife files a state return for her state and you don't file one (since your state has no income tax). Regarding backdoor Roth IRA conversions - there's good news! Filing MFJ vs MFS doesn't affect the mechanics of the backdoor Roth, especially since you both have $0 Traditional IRA balances. However, filing MFS does reduce your Modified Adjusted Gross Income (MAGI) limit for Roth IRA contributions to just $10,000, which could prevent direct contributions. With MFJ, you'd have a much higher MAGI limit.

Just wanted to share my experience with a similar situation. I was struggling with figuring out the best filing approach when my husband and I lived in different states (I was in NY, he was in FL). I tried using TurboTax but got super confused about how to handle our state returns. I ended up using https://taxr.ai instead - uploaded our W-2s and just answered questions about our living situation. The system figured out we should file MFJ federally but separated our state filing situation perfectly. We got a way bigger refund than we expected because it found deductions we would have missed - and it properly kept my husband's income from being taxed by NY. Was a total gamechanger for our complicated multi-state situation!

Just wanted to follow up - I tried taxr.ai after seeing this thread and it was seriously impressive for our multi-state situation. We have rental property in Georgia while living in Texas, and I was worried about handling the partial-year residency complications. The software was able to handle all our state allocation issues perfectly - it even caught that I needed to file a non-resident return in Georgia just for the rental property income. Saved us about $2,200 compared to what I calculated on my own because it correctly applied some credits I didn't know we qualified for. Totally recommend it if you're dealing with the multi-state marriage tax situation! Way less stressful than I expected.

If you guys are having trouble getting answers from the IRS about multi-state filing, try https://claimyr.com - I spent weeks trying to get through to someone at the IRS about our complicated state situation. After seeing it recommended on another thread, I gave it a shot. You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically it holds your place in the IRS phone queue and calls you when an agent is about to answer. I was skeptical but it worked perfectly - got connected with an IRS agent in about 2 hours (instead of endless busy signals or waiting on hold forever). The agent was able to clarify exactly how we should handle our multi-state situation and confirmed we could file MFJ federally while keeping our state filings separate. Saved me days of frustration and uncertainty.

I have to eat my words. After criticizing the Claimyr service, I was still stuck trying to reach the IRS about my multi-state filing question for WEEKS. Finally broke down and tried it, and within 2 hours I was talking to an actual IRS representative who solved my issue in minutes. The agent confirmed that for my situation (similar to yours with different state residencies), filing MFJ federally was definitely better and would save us about $3,800 compared to MFS. She also clarified exactly how to handle the state returns separately. I still think it's ridiculous we have to pay for decent access to the IRS, but I can't deny the service works exactly as advertised. Saved me countless hours of frustration.

One thing to consider that nobody has mentioned yet: if you do backdoor Roth conversions and file MFS, the income limits are MUCH lower. With $0 traditional IRA balances you're in good shape for the conversion itself, but check if your income exceeds the MFS limits. Also, don't forget that MFS prevents you from claiming several valuable credits like student loan interest deduction, education credits, EIC, and child tax credit (if you have kids). The additional standard deduction for MFJ might actually outweigh your mortgage interest deduction too, especially if the interest amount decreases over time.

Watch out for the "married filing separately" trap if either of you have student loans on income-based repayment! If you file MFS, they'll only consider that person's income for the payment calculation, which can be advantageous. But if you file MFJ, they look at your combined income which can dramatically increase payments. This caught me and my wife off guard last year - our combined income drove her payments way up after we filed jointly. Might not apply to your situation but worth considering.

Mortgage interest is just one part of the equation and may not be as beneficial as you think. Your $42k in interest would be tax deductible, but remember: 1) You'd also need to add in property taxes under SALT (state and local tax deduction), which is capped at $10k 2) Only the amount OVER the standard deduction ($29.2k for MFJ) gives you tax savings, so really only about $13k of your interest is actually saving you money 3) With MFS, the standard deduction per person is only $14.6k, so you'd have less to overcome Have you run the actual numbers through a tax calculator? I'd be shocked if MFS works out better when factoring in the higher tax brackets and lost credits.

Great question! As someone who went through this exact situation last year, I can share what worked for us. We ended up filing MFJ federally and it saved us about $4,200 compared to MFS, even with our different state situations (I'm in Tennessee - no income tax, spouse in Virginia - 5.75%). The key insight is that federal and state filing decisions are separate. You can file MFJ federally while still handling your state taxes appropriately - your wife would only pay state tax on her income earned in her state, and you wouldn't need to file in her state at all. A few important considerations for your situation: 1) **Mortgage interest benefit**: With MFJ, you'd get the full $42k deduction against your combined income in higher tax brackets. With MFS, you'd split this somehow and lose the bracket advantages. 2) **Backdoor Roth**: Definitely file MFJ for this! MFS limits you to just $10k MAGI for direct Roth contributions, while MFJ gives you much higher limits. The conversion mechanics are the same either way since you have $0 traditional IRA balances. 3) **Other deductions**: MFJ preserves access to student loan interest deduction, education credits, and other benefits that disappear with MFS. I'd strongly recommend running the numbers both ways using tax software or consulting a professional, but in most cases MFJ comes out significantly ahead even with multi-state complications.