The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Skip To Main Content. Subscribe: Apple Podcasts Spotify iHeartRadio Advantages of filing jointly There are many advantages to filing a joint tax return with your spouse. Couples who file together can usually qualify for multiple tax credits such as the: Earned Income Tax Credit American Opportunity and Lifetime Learning Education Tax Credits Exclusion or credit for adoption expenses Child and Dependent Care Tax Credit Joint filers mostly receive higher income thresholds for certain taxes and deductions—this means they can earn a larger amount of income and potentially qualify for certain tax breaks.
Consequences of filing your tax returns separately On the other hand, couples who file separately receive few tax considerations. If you file a separate return from your spouse, you are automatically disqualified from several of the tax deductions and credits mentioned earlier. In addition, separate filers are usually limited to a smaller IRA contribution deduction. They also cannot take the deduction for student loan interest.
When you might file separately In rare situations, filing separately may help you save on your tax return. For example, if you or your spouse has a large amount of out-of-pocket medical expenses to claim and since the IRS only allows you to deduct the amount of these costs that exceeds 7. That would meet the 7. Filing separate returns in such a situation may be beneficial if it allows you to claim more of your available medical deductions by applying the threshold to only one of your incomes.
Deciding which status to use. All you need to know is yourself Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest. Looking for more information? Get more with these free tax calculators and money-finding tools. Tax deadlines have been extended this year for your federal and state returns. Still need to file? Wondering if you need to pay state of Michigan taxes? This link is to make the transition more convenient for you. You should know that we do not endorse or guarantee any products or services you may view on other sites.
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Here's what experts have to say about filing jointly versus separately, plus advice on how to decide what's right for you. After that, the rates continue to increase on a marginal basis. Additionally, the IRS offers spouses who file jointly one of the biggest standard deductions each year, according to TurboTax. Another reason to consider filing together is that joint filers are often eligible to receive meaningful savings in the form of tax credits, such as:.
As long as you were married by Dec. While "it's almost always better to file jointly because of a lower tax responsibility overall," there are "very specific situations" when it pays to submit separate returns, Guglielmetti says.
You or your spouse have high or unpaid student loan debt: If one of you has defaulted on your student loans, meaning you haven't paid on them in days or more, you should consider filing separately, explains Malik S. Lee, an Atlanta-based certified financial planner at Felton and Peel. That's because, in this case, your joint tax refund could end up being rerouted through the Treasury Offset Program and put toward the unpaid debt, meaning neither of you would get a refund.
However, if you had filed separately, at least one of you would have a refund. That way, their income is not considered in the repayment calculation," says Guglielmetti. One of you has excessive medical bills: When you or your partner get sick, "you can generally deduct your medical expenses above a threshold of your income," says Guglielmetti. In , the IRS allows taxpayers to deduct qualified unreimbursed medical care expenses for the year that exceed 7.
If both you and your spouse earn an income and you file jointly, your medical expenses would have to be higher in order to be able to make any deductions.
But if you file separately — so your tax return reflects just one or your salaries — "you will reach the threshold faster and be able to deduct more of those expenses earlier on," says Guglielmetti.
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