I was just concerned with the ACA stuff since it’s hard to get any answers, and when she got credit the previous year we had to file joint since they want to see the combined income.
Well, you could have filed MFS for 2020, too, but as MFS, she still would have had to pay back any advance Premium Tax Credits (PTC) she’d received. That’s because those who are MFS are ineligible for the PTC unless you had lived apart for the entire year, she was a victim of domestic abuse, or she was a victim of spousal abandonment. (I’m assuming that none of these applies to you and your wife.) See pg 7 of IRS Pub 974 https://www.irs.gov/pub/irs-pdf/p974.pdf for details. Congress was very clear that for anyone who is considered married at the end of the year (even if you only get married on Dec 31), the PTC is contingent on the joint income for that year, with those very limited exceptions.
I will point out that for 2020 and 2021, the American Rescue Plan limited ACA premiums to 8.5% of your joint income. Any excess was to be refunded as a subsidy. Since she was only covered for 2 months in 2021, that probably won’t help for your 2021 filing, but it may have helped in 2020. Because the American Rescue Plan wasn’t passed until March, 2021, the change for 2020 was retroactive. So, if you filed early, you may want to go back and check your return to see if you are now eligible for a subsidy for 2020.
The main reason I wanted to try the MFS was due to a $25K capital gain that my wife received. You’re probably right about the end result, but I’ll give it a shot.
With a $25k capital gain alone, SS income that she receives will be considered taxable, so that probably won’t be beneficial. Depending on her other taxable income, some/all of the capital gain may be taxed at 0% That said - even with your joint income, some/all of the capital gain may still be taxed at 0%, since the income brackets for capital gains are doubled for MFJ compared to MFS. So running both sets of returns (one MFJ and 2 MFS) is probably the only way that you will be able to see which way is better for you financially.
AJ