When it comes to tax filing, many married couples choose to do so jointly. However, while this often results in savings, it doesn’t always. The following explains the differences in filing statuses so you and your spouse can make the best decision for your shared financial future. 

Married Filing Jointly 

Along with the standard deduction, married filers can also qualify for other credits and deductions, including a child and dependent care tax credit. Married couples are provided higher income thresholds, which means they can earn a healthy living while also being eligible for tax savings. Many also find the tax filing process to be more simple when filing together. 

Married Filing Separately

In spite of the above benefits, there are specific circumstances when your savings may be greater by filing separately since it prevents one spouse’s tax liability from impacting the other. For example, couples with medical expenses may want to consider it. When filing jointly, you’ll naturally have a higher adjusted gross income (AGI). This can impact the amount of out-of-pocket medical costs you can deduct on your taxes since you’re only allowed to deduct an amount that is greater than 7.5% (2018), 10% (2019).

Those with student loans may also want to keep their taxes separate, as the larger joint earnings may affect their income-based repayment plan. In most of these situations, you will also need to itemize deductions, rather than taking the standard one.

Tax filing can be complicated no matter what your marital status is. If you have questions, the accountants at PMC Tax Services are here to lend a hand. Serving the Lincoln, NE, area since 1989, these tax planning professionals will advise you on claiming deductions and which tax filing status works best. Schedule a consultation today by calling (402) 467-5529. Read from satisfied clients on Google. You can also visit the website for more information on services.