Should you and your spouse file your taxes jointly?
- April 17, 2023
- 3 min read
The difference between filing taxes jointly and separately
The benefits and disadvantages of each option
How to decide how to file as a married couple
When you tie the knot, you have to decide just how much you and your spouse will share — from bank accounts to calendars to chores. The same goes for tax time and choosing whether to file jointly or separately. Most people assume it’s always advantageous to file jointly, but that’s not always the case. Carefully weigh the pros and cons of each option before you decide what works best for your situation.
Married couples in the United States have the option of filing their tax returns jointly. If you go with this approach, you and your spouse report your combined income, dedications and credits on one tax return. You and your spouse may also choose to file separately.
Be married on the last day of tax year. For example, to file married jointly on your 2022 taxes, you must be married by December 31, 2022. If you are unmarried, divorced or legally separated on December 31, you are considered unmarried for the purposes of filing taxes, unless your spouse has died.
Both you and your spouse must agree to file a joint tax return.
For most couples, filing jointly is simpler than filing separately, and it will reduce your tax burden, too.
The vast majority of married couples could get a lower tax rate when they file jointly. You could receive a larger tax refund or a lower liability than if you had filed separately. With combined incomes, a higher earner may be placed in a lower tax bracket because the tax rate ranges for married filers are different than those for single filers.
Earned Income Tax Credit
American Opportunity and Lifetime Learning Education Tax Credits
Exclusion or credit for adoption expenses
Child and Dependent Care Tax Credit
Disadvantages of filing separately
While you have the option to file separately if you’re married, it can come with some downsides. You’ll be excluded from eligible tax credits, receive a lower standard deduction and could fall into a higher tax rate if you file separately. The capital loss deduction limit is $1,500 when you file separately, compared to $3,000 on a joint return. You’ll also typically be limited to a smaller IRA contribution deduction.
Although it usually makes more sense to file jointly, some circumstances make filing separately the better option:
The amount of money you earn determines your tax bracket. For some high-income couples who earn around the same amount, they could actually benefit from filing separately.
If you file separately and you itemize your deductions, you can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. If one spouse has a lot of medical bills and earns less income, it could be easier to hit the 7.5% income threshold in order to deduct those costs.
If you or your spouse (or both of you) are on an income-driven student loan repayment plan, and you file jointly, your combined income will be considered the borrower’s income. With a higher reported income, your minimum required loan payments will increase.
Marrying your better half comes with a lot of perks, including some potential tax breaks. But just because filing jointly is usually the best choice for married couples, it doesn’t mean it’s necessarily right for you. Carefully consider all the factors, and consult with a tax advisor to assist you with determining your best option, before deciding how to file as a married couple.