Question: Bonnie and Jake (ages 35 and 36, respectively) are married with no dependents and live in Montana (not a community property state). Because Jake has large medical expenses, they seek your advice about filing separately to save taxes. Their income and expenses for 2014 are as follows:
Bonnie`s salary $ 42,500
Jake`s salary 26,000
Interest income (joint) 1,500
Rental loss from actively managed rental property (23,000)
Jake`s unreimbursed medical expenses 8,500
All other itemized deductions:
Bonnie 9,000
Jake 3,400
None subject to limitations
Determine whether Bonnie and Jake should file jointly or separately for 2014