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Married Filing – Joint or separate?

I get asked this question a lot, should we file a married filing joint or married filing separate return? I have my opinions but here are the facts:

It doesn’t matter how long you were married during the year. For tax purposes, you are considered married if you were married on the last day of the tax year, even if you are in the process of a divorce that has not yet been finalized.

Assuming you meet the marriage criteria, how do you decide? Start by considering the disadvantages of filing separately and think of how many items apply to your situation. Keep in mind that if you file separately, you and your spouse must choose to both take the standard deduction or both itemize – you cannot take separate approaches. Your standard deduction drops significantly when filing separately, and many itemized deductions are reduced through income phase-outs or eliminated entirely.

Filing separately reduces or eliminates potential tax credits that are subtracted directly from your tax bill. For example, you cannot take the Earned Income Tax Credit (EITC), the Elderly or Disabled Credit, or the educational credits (American Opportunity Credit or Lifetime Learning Credit) or adoption credit.

Don’t forget about community property. Arizona, California and other states are Community property states; therefore, you need to split property (your income and deductions) for tax purposes. Should you both itemize, you may be faced with a hideous pile of paperwork to split assets 50/50.

Those are pretty powerful arguments to file jointly. However, there are a few reasons to consider filing separately.

  • Questionable Tax Practices You should file separately if your spouse is stretching, or outright breaking, the tax laws. Signing a joint return makes you responsible for paying any taxes, penalties, and fines that your spouse incurs but refuses to pay.
  • Separation/Divorce Separating your finances as part of an in-process separation or divorce lends itself to also filing your taxes separately.

When in doubt ask us. We can run an optimization report to determine the best tax situation for you.

Please call or email us for more information and questions.

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Jocelyn Sihathep (Jo1)

Office Manager

We have a Sun Devil in the house! We are honored to add to our team, Jo. She is a graduate of Arizona State University (Fear the Fork) and is looking to broaden her knowledge and understanding of business and accounting.

She is the engine of our fine-tuned machine. Her “can do” attitude, commitment to customer service and outstanding organization skills allows us to focus on what matters most, our clients. She is amazing with technology and strives for excellence. She embraces the entrepreneurial spirit and is a great asset to our team.

Jocelyn Weatherley (Jo2)

Accountant

Jo was previously an accountant for a $60M company and their 13 subsidiaries. She is in charge of our accounting and bookkeeping department and serves our clients on their time schedule. Whether it is weekly, monthly or quarterly she helps provide reliable, useful and accurate information to our clients on their terms.

Jo performs full accrual accounting and is responsible for reconciling all accounts, journal entries, month end closing procedures and preparation of internal financial statements and analytics. She also assists in the preparation of sales and payroll tax returns. She holds a wide range of knowledge, from QuickBooks to travel (she spent most of her life in the UK), she’s your girl. She is excited to join the CCA team and ready to conquer tax season head on!

Dixie Cary

CPA and Tax Manager

Dixie is a Minnesota CPA and experienced accountant. She has over 25 years of accounting in both audit and tax, but her passion is tax. After years in the cold, she decided to leave the mid west and find a new home in Sunny Arizona. We are so happy that Dixie has joined our team.

Dixie leads and manages our entire tax department. She assists and leads a team through our busiest times while delivering quality, complete and accurate tax services for our clients. She is proficient in preparation, planning, and education of federal and state income taxes for individuals, businesses, estates, trusts, and exempt organizations.

Theresa Elaine Valade

CPA and Managing Partner
Theresa has over 27 years of experience in tax, audit and consulting. She was with the International CPA Firm of Arthur Anderson in Phoenix and San Francisco. She most recently was a partner with Moffitt & Company, P.C. Her areas of specialization are business consulting and advisory, audits, income tax planning and preparation, and IRS audit representation. Her industries of specialization are nonprofits, real estate, hospitality, franchises, mortgage banking and brokering, title insurance, escrow, health, and beauty.
One of Theresa’s biggest honors is being named the 2020 CPA firm of the year for her commitment and service to her clients during the challenges imposed by the COVID-19 pandemic. Putting passion and personalization at the forefront Theresa has led her firm to excellence by not only providing measurable results for clients but making them feel well taken care of during times of great uncertainty.
Theresa is also a member of the prestigious, Arizona Society of CPAs, ASCPA, 100% Membership Club. It is an honor to be part of this club that exhibit’s a high level of commitment to the Arizona Society of CPAs. We are privileged to be able to convey to our clients, staff, and colleagues of Theresa’s significant commitment to the CPA profession.