Married Couples: Filing “Jointly or Separately” What’s the Difference?
As a married couple you have some choices to make when tax season rolls around. There’s no doubt about it, you must file, but should you do it as Married Filing Jointly, or Married Filing Separately?
Now some taxpayers are under the assumption that you only need to file Married Filing Separately when you are going through a divorce or separation. However, that’s not always the case. There are some benefits to married couples filing Married Filing Separately. It depends on a few things:
- Is one person’s annual income more than the other?
In some cases, combining your annual income will help you save money, because as a combined income, you’ll most likely rank at a lower tax rate. Although this all depends on how much each person makes. For instance, if both people each brings in $40,000 – $50,000 a year, then whether you filed jointly or separately may not matter because you may end up paying the same in taxes. However, if one person makes significantly more than the other, it might be more beneficial to file Married Filing Separately. However, there are other things to take into consideration that may sway your decision.
- Was either one of you a student during the tax year in question?
If you are looking to take advantage of some education benefits, then it’s best to file Married Filing Jointly because filing separately will not give you this benefit. So it might be wise to take into account how long you were enrolled as a student for that tax year. Many people get continuing education and go to school for a few months. If this is the case, it may not be worth taking the education credit. It’s up to you to weigh the pros and cons of the total adjusted gross income and whether or not it’s worth it to file Married Filing Jointly or Married Filing Separately.
- Do you have any children?
Children are another big factor in determining whether or not you’ll want to file separately or jointly. If you want to claim the Child and Dependent Tax Credit you will have file jointly. Filing separately will not allow you to take this credit.
So here it appears that it may very well be more beneficial if you file Married Filing Jointly. So when is it beneficial to file Married Filing Separately?
If you have a substantial amount of out-of-pocket medical expenses, it’s going to be more beneficial to file Married Filing Separately because with this option, you’ll be able to file more than 10%, as would be the case with filing jointly.
We understand that tax matters can be overwhelming. That’s why Success Tax Relief is here to assist you in filing your annual taxes making sure that you get the most out of your tax return. Contact our office for a free consultation. Call us today at 1-877-825-1179 or reach us through our online form.