For most couples, it’s best to file taxes jointly. By doing so, there are advantages including tax breaks.
Are you wondering if you should file your taxes jointly or separately? For couples that have recently tied the knot and even for those who have been married for years, this is a very common question. For most couples, it’s best to file taxes jointly. By doing so, there are advantages including the IRS extending tax breaks.
For the majority of couples, the benefits of filing taxes jointly outweigh filing taxes separately. However, there are certain situations when it’s best to file separate returns. For example, couples with one spouse having a large total of medical expenses, filing separately may pay off.
The Need-to-know Facts
- You may file jointly if you are legally married (if you were legally married on or before the last day of the year).
- By filing jointly, both individuals report all income, deductions, and credits onto one tax return.
- Upon deciding to file taxes jointly, both spouses must agree to file a joint tax return and both must sign the return.
- In the case that during the tax year your spouse has died, you still have the option to file jointly or separately.
- You are responsible for your spouse. According to the IRS from Publication 501 (regarding filing jointly):
“Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return…One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.”
Advantages of Filing Jointly
The IRS strongly encourages couples to file taxes jointly. The following are advantages of doing so;
- The IRS allows joint filers to deduct a significant amount of their income instantly.
- Joint filers are allowed to deduct two exemption amounts.
- Filing taxes jointly qualifies the couple for multiple tax credits.
- For certain taxes and deductions, couples filing jointly receive higher income thresholds, meaning they still qualify for certain tax breaks while earning a larger amount of income.
Who Should File Separately?
Although there are many pros to filing jointly, there are certain cases in which the advantages of filing separately outweigh the advantages of filing jointly.
- Filing separately is best if you or your spouse needs to claim an excessive amount of out-of-pocket medical expenses. (The IRS allows you to deduct the amount that exceeds 10% of your adjusted gross income).
- According to Publication 501 from the IRS, you should file separately if:
“You believe your spouse is not reporting all of his or her income, or if you do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does not pay enough estimated tax.”
Still confused on how to file? If you remain unsure to file jointly or separately, it’s best to first prepare your taxes both ways. Depending on what situation saves you and your spouse the most money will be the main indicator on how to file. Regardless, RapidTax can help figure out what is best for you!