Filing jointly may benefit most married couples, but certain people might find that filing separately is the better alternative. Here’s how to figure out which tax filing status is ideal for you.
Which Status Is Better?
You have two filing options when you’re married: jointly or separately. Which status is better for you depends on your circumstances. Remember, for tax purposes, a married couple is defined as married by December 31.
The Benefits of Filing Jointly
- If both spouses have fairly equal incomes, filing jointly will usually result in the lowest combined tax bill. The IRS allows married couples to take advantage of certain tax breaks that aren’t available to singles.
- For example, the standard deduction is doubled for married couples filing jointly. This can result in significant savings on your taxes.
- Another benefit of filing jointly is that you can split certain income and investment gains between you and your spouse. This can help reduce your overall tax bill.
Advantages of Filing Separately
- On the other hand, if one spouse has a much higher income than the other, filing separately may be a better option. This is because the higher-earning spouse may end up paying more taxes when filing jointly.
- Individually, each spouse is only responsible for their income and taxes. This can be helpful if one spouse has a lot of deductions or credits.
- Also, if one spouse has a lot of debt, it may be better to file separately so that the other spouse isn’t held jointly responsible.
How to Decide
The best way to decide which filing status is proper for you is to run a few scenarios using tax software or a tax calculator. This will help you see how much you would save or pay in taxes under each scenario.
Keep in mind that your decision may also be influenced by other factors, such as whether you want to be responsible for your spouse’s debts.
Talk to a tax professional like The Oasis Firm to help decide which filing status is best for you. A professional can look at your specific situation and give you tailored advice.
Resources:
https://www.businessinsider.com/personal-finance/what-is-my-filing-status-for-taxes
https://hermoney.com/connect/marriage/earn-more-money-than-my-husband/