Bonnie and Jake 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 2012 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

Determine whether Bonnie and Jake should file jointly or separately for 2012.