When you decide to file for federal income taxes, you have to choose a filing status. It is possible that your status will change at some point in life, such as after getting married, your tax filing status changes from single to married. However, you can still decide whether to pay your taxes separately or with your spouse. Depending upon your specific tax situation, you can decide whether to file taxes as single or married jointly or separately. Here we will help you to decide what could be the best tax filing status for you.
Whether to File Taxes Single or Married
Before moving forward on what you prefer as your filing status to receive maximum benefits, let’s look at the IRS’s definition on who can file taxes as single or married status. As per the IRS definition of single, you can only choose to file as single status, if you are unmarried, legally separated, or divorced on the last day of the tax year. Similarly, for the married status, you need to be legally married on or before the last day of the tax year, i.e., December 31st. Remember that a married couple can file jointly or separately but cannot file under the status of single or head of the household.
Most married couples prefer to file jointly because joint filing status is much more advantageous than a separate status. Along with this, most of the tax professionals agree that filing jointly is financially advantageous for a couple. So if you can legally file as married status, then you would prefer joint status over the single or married filing separately status.
Advantages and Disadvantages
Here are the advantages and disadvantages to decide whether you should decide on joint tax filing status or not:
Advantages of Filing Jointly as a Married Couple
- Lower Tax Bracket:
- If you are married, there are chances that you may qualify for a lower tax bracket on filing jointly for federal taxes. That means you don’t have to pay higher tax bills and may qualify to get a refund.
- More Credits and Deductions:
- Some tax credits and deductions are only available for you if you chose to file together with your spouse. These credits and deduction in federal tax return include earned income tax credit, child and dependent care, education credits, credit for adoption expenses, and your children loan interest deductions.
- Save Time & Money:
- Filing for a separate return is time-consuming because both the spouse has to itemize separately. However, filing jointly as a married couple would require you to prepare only one tax return, which is ultimately convenient & less expensive.
- Deduct a Bigger Capital:
- For a married couple filing jointly, the capital loss deduction limit is $3,000 while it is $1,500 when filing separately.
Disadvantages of Filing Jointly as Married Couple
With many advantages of filing jointly, there are also some disadvantages in which you cannot ignore :
- Delinquent Debts:
- Choosing to file for your taxes as a couple means you agree to take the responsibility to pay any tax liability of your spouse. That means if your spouse has any delinquent debts, you are obligated to pay them as well.
- Different Lifestyle:
- It is a common issue for some couples, that both of them have different lifestyles and expenses due to which one spouse has to suffer more tax liability. If this is also an issue in your spouse’s case, then you must choose a separate filing status.
