When it comes to taxes, it can be a bit confusing – especially when you add another person into the mix. If you’ve recently gotten married and are uncertain of which filing status to use, take a look at the following benefits that filing jointly provides.
Higher Standard Deduction
A major factor in your taxes is your taxable income. Everything pretty much revolves around that – all of your potential credits, deductions, and the overall amount you owe. And the standard or itemized deduction you take is an important component of your taxable income.
When you’re single or married filing separately, the current standard deduction for single people or married filing separately is $12,950. If you’re married filing jointly, it goes up to $25,900. This amount can greatly reduce your taxable income. For most, it takes away the need to itemize deductions as the standard deduction provides a more favorable outcome.
More Tax Credits
Married filing jointly can actually gain you many more tax credits than married filing separately. The following are some of the most common ones.
- Earned Income Tax Credit: Earned Income Tax Credit, otherwise known as EITC or EIC, is available to low and moderate-income families. It can decrease the amount of taxes you owe and, typically, provide a refund.
- Adoption Credit: If you’ve adopted a qualifying child, the Adoption Tax Credit is available to help offset the associated expenses.
- American Opportunity Credit: The American Opportunity is available to families to help reduce college costs for the first four years.
- Lifetime Opportunity Credit for Higher Education Expenses: This is another credit available for reducing college costs.
- Child and Dependent Care Tax Credit: If you have children or another dependent who you have to spend money on for their care, this credit can help. If you’re married, you must file together to get it. If you’re legally separated, you can sometimes claim it.
Less Time and Fewer Complications
To be truthful, filing separately can get a bit complicated for a few reasons. This is because of rules such as only one parent can claim a child.
Additionally, you both have to file your separate taxes in a similar fashion. If one of you decides to itemize, the other has to do the same. Likewise, if one of you chooses the standard deduction, the other has to follow suit. As such, it can save a great deal of time and headaches to just file together.
What If My Spouse Owes Money I Don’t Owe?
This is more common than you’d think. Sometimes, one spouse hasn’t been paying their taxes or hasn’t been reporting everything accurately. If you’re aware of this, it’s best to file separately. You don’t want to get tied into these issues.
Unfortunately, though, sometimes the other spouse doesn’t find out about such issues until after they’ve already filed. What do you do then? Well, fortunately, the IRS takes situations like this under consideration and provides spousal tax relief options. However, you have to have not known about these erroneous issues before filing.
In some cases, you can find tax relief for debt incurred before your marriage. For example, if your spouse has student loans that were incurred before your marriage and has not been making payments, the government might take the money from any refund you might receive. In cases like these, you can file as an injured spouse and, typically, receive a portion of the refund since you were not responsible or involved in that debt.
Also, if your spouse has left you or you’re getting divorced, the IRS will usually take all of this into consideration. If, for any reason, your taxes have been negatively impacted by your spouse’s situation, it’s always beneficial to see what spousal tax relief options are available for your situation.
