Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Handling Your Money. The Legal Side of Marriage. Marriage and Taxes. Key Takeaways Though most married couples file joint tax returns, filing separately may be better in certain situations. Couples can benefit from filing separately if there's a big disparity in their respective incomes, and the lower-paid spouse is eligible for substantial itemizable deductions. Reasons to file separately can also include separation and pending divorce, and to shield one spouse from tax liability issues for questionable transactions.
Filing separately does carry disadvantages, mainly relating to the loss of tax credits and limits on deductions. Article Sources.
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This compensation may impact how and where listings appear. On the other hand, couples who file separately receive few tax considerations. Separate tax returns may give you a higher tax with a higher tax rate. The standard deduction for separate filers is far lower than that offered to joint filers.
The best way to find out if you should file jointly or separately with your spouse is to prepare the tax return both ways. Double check your calculations and then look at the net refund or balance due from each method. Remember, with TurboTax , we'll ask you simple questions about your life and help you fill out all the right tax forms.
Whether you have a simple or complex tax situation, we've got you covered. Feel confident doing your own taxes. Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest. For Simple Tax Returns Only. Getting Married Tax Tips.
Tax Tips for Separated Couples. If you live in a community property state, the income you and your spouse earn is split evenly between you, as are your expenses unless they are paid by one spouse with his or her separate non-community funds—for example, money you earned or inherited before marriage. There are several disadvantages to filing separately that you need to be aware of, however, because these can easily outweigh any potential benefits:.
As a result of the Tax Cuts and Jobs Act, the tax rates in effect during through for married taxpayers filing separate returns are exactly half those for marrieds who file joint returns. Nevertheless, most married people save on taxes by filing jointly, particularly where one spouse earns most or all of the income. This is because filing jointly shifts the high earner's income into a lower tax bracket. If spouses earn about the same income, there should be little or no difference in their tax rates whether they file jointly or separately.
The only way to know for sure if you'll pay more or less taxes by filing separately or jointly is to figure your taxes both ways. This isn't hard to do if you use tax preparation software. There is one potential huge drawback to filing jointly: As a general rule, when a married couple files a joint return each spouse is jointly and individually liable for the entire tax owed on the return.
This means that either spouse can be required to pay the tax due, plus any interest, penalties, and fines. A spouse can claim "innocent spouse relief" and avoid personally paying the other spouse's taxes if he or she can show the IRS that: 1 the understatement of tax was due to the other spouse, and 2 the spouse did not know, or have reason to know, that there was an understatement of tax when he or she signed the joint return. However, both propositions can be hard to prove.
You'll avoid being personally responsible for your spouse's taxes if you file a separate return. This is something you should seriously consider if you know your spouse cheats on his or her taxes. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.
The attorney listings on this site are paid attorney advertising. Key Takeaways Married filing jointly is an income tax filing status available to any couple that has wed as of Dec. It is best used by couples that have one spouse who earns significantly more money than the other.
It allows a couple to use only one tax return, but both spouses are equally responsible for the return and any taxes and penalties owed. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
A joint return is a U. Taxpayer A taxpayer is an individual or business entity that is obligated to pay taxes to a federal, state, or municipal government body. Filing Status Filing status is a category that defines the type of tax return form a taxpayer must use when filing his or her taxes. Filing status is tied to marital status.
Married filing separately is a tax status for couples who choose to record their incomes, exemptions, and deductions on separate tax returns.
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