Selecting the Right Tax Filing Status for Married Couples

It makes all the planning leading up to your big day worth it. As you walk down the aisle, you’re probably not thinking about your income tax situation. But, your new tax situation is possibly one of the most important items to tackle as a newly married couple.

Here’s what you and your new spouse need to know.

Your income tax filing options

Your legal marital status on the last day of the tax year dictates your marital status for the entire year for income tax purposes.

That means if you were legally married on Dec. 31, 2024, you are considered married for the entire 2024 tax year. That’s true whether you got married in January or December.

Your tax filing status options as a married taxpayer are:

Married filing jointly advantages

Many tax advantages exist for couples who elect to file joint returns. Joint filers are usually less taxed than couples who file separately. This means you can earn more income and still take advantage of these tax breaks. That means you can earn more income and still take advantage of those tax breaks.

Additionally, joint filers may qualify for several tax benefits that might not otherwise be available, such as:

Married filing jointly disadvantages

Married filing jointly means each spouse is liable for all income tax obligations, including the complete income tax bill, any interest, and potential penalties.

However, there are three types of relief from joint responsibility available:

Innocent spouse relief

allows a husband or wife to request absolution from paying extra taxes if their spouse improperly reported or entirely withheld items on the tax return.

Separation of liability

1. grants separate tax liabilities to spouses who are legally separated if one of the spouses improperly reported items on a tax return. In that case, the other spouse is only liable for the amount of tax allocated to them.Equitable relief
2. is sometimes granted if an item isn’t appropriately reported on a joint return and the spouses don’t qualify for innocent spouse relief or separation of liability. Individuals may also be eligible for relief if they haven’t paid the tax on their joint return. Let’s say that your combined adjusted gross (AGI) income is high and you both have a lot to claim in terms of medical expenses. In 2024, the IRS will only allow you to claim medical costs that exceed 7.5% of your combined AGI. If you have a large AGI, it can be difficult to reach that amount. In that case, filing a separate return might be more advantageous and allow the person with the medical expenses to claim a bigger tax deduction.Married filing separately disadvantages
3. Filing separately from your spouse comes with a variety of tax consequences. You may not be able to access as many tax breaks and you could face a higher rate of tax as an individual. Plus, the standard deduction is much lower when filing separately: $14,600 as a single filer in 2024 vs. $29,200 for joint filers.Some tax breaks that might be affected when filing separately include:

Separate filers cannot take advantage of the student loan interest deduction.

Filing separately limits how much you can contribute to a Roth IRA.

When you file separate returns, you are only eligible to deduct $1,500 in capital losses versus $3,000 as joint filers.

As a separate filer, you’re also tied to how your spouse handles their deductions. If your spouse itemizes their deductions on a separate return, then you must also do so. If you originally chose to file separately, but later decide it wasn’t the best choice, you can amend the return and change your filing status to married filers filing jointly. If you choose to file a joint return, however, you cannot amend to change your filing status after the tax return due date.

Possible state implications

• The filing requirements for each state vary. Check with your state to see if they require you to use the same filing status on your state return as you use on your federal return.
• TaxAct can help you choose.
• A quick way to determine which filing status benefits you the most is to open a TaxAct(r) account and enter your information. Our product will walk you through step-by-step instructions highlighting which scenario gives you the most tax savings.

This article is for informational purposes only and not legal or financial advice.

All TaxAct offers, products and services are subject to

applicable terms and conditions

.

Story originally seen here