Should I File Taxes Separately or Jointly with My Spouse?

In today’s world, having both parents working is the norm rather than the exception. However, having both mom and dad at work can tend to complicate things at home. There are decisions to be made in several areas; such as babysitting/daycare for the kids, who will do the grocery shopping, who will cook the meals, and one of the biggest is how to handle taxes. Taxes

Taxes tend to become far more complicated when couples marry. Along with marriage usually brings children who may be eligible for credits, a home purchase wherein the mortgage interest can be deducted, and many others. Before any of these issues are dealt with, just the act of marrying alone often brings up a dilemma; do I continue to file my taxes separately or should we choose married filing jointly?

The Benefits of Filing Married Jointly: In most instances, couples will realize more tax savings when they file their taxes jointly. Joint filers qualify for a number of deductions and credits, including:

  • Child and Dependent Care Credit
  • Earned Income Tax Credit (EITC)
  • Lifetime Learning and American Opportunity Credits for College

There is also the ability to claim two standard deductions (in 2013 the amount for each was $6,100) thus further reducing your taxable income. Married couples have higher income thresholds for several other deductions and credits as well, giving them the ability to realize even greater tax savings.

The Benefits of Married Couples Filing Separately: Though in the vast majority of cases it will make sense for married couples to file their taxes jointly, there are a few instances when it might make sense to file separate returns. For example, if there is a large disparity between the incomes of the spouses, it may make sense for one spouse to file in a much lower income bracket in order to lower the percentage they are paying.

Another scenario that might warrant separate filings is if one spouse incurred some unusually large out of pocket medical expenses. The IRS will only allow you to deduct medical expenses above 10% of your gross income. When incomes are combined, this number could become too high to qualify for much (if any) deduction of these expenses.

Finally, there are times when married couples should file separately regardless of the tax liability due to separation and/or if one spouse does not want to be responsible for the accuracy of the other spouse’s tax return.

The decision on which filing status to adopt when you get married will ultimately come down to your own individual circumstance. If you are unsure about what to do in your situation, speak with a tax accountant that can give you the qualified guidance you need to put you in the best tax liability position possible.

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