Many changes occur when you get married, including how you file your taxes. The IRS gives married couples the choice of filing either jointly or separately. As newlyweds, it’s essential for you and your spouse to carefully consider each option. This will help ensure you’re maximizing your deductions and avoiding a higher tax liability. The following guide offers some insight into determining which filing status will be most beneficial for your situation.

A Married Couple’s Guide to Filing Taxes 

Benefits of Filing Jointly 

The majority of married couples file their taxes jointly because it allows them to take advantage of a larger standard deduction and offers several credits that aren’t available to those filing separately. This includes the Earned Income Tax Credit, Lifetime Learning Credit, American Opportunity Credit, Child and Dependent Care Credit, and adoption expense credit.

These can help reduce your tax bill considerably. There’s also an opportunity to make more generous tax-deductible contributions to a retirement account when you file a joint return.

When to File Separately 

While it’s generally best to submit a joint return, there are a few reasons it may be more favorable to file separate ones. For instance, if you believe your spouse is breaking any tax laws, filing separately will keep you from being held responsible for their debts and penalties. Another consideration is if either of you has incurred substantial out-of-pocket healthcare costs.

In this case, you'll likely need to file separate returns to qualify for the medical expense deduction. To take this, expenses must exceed 10% of your adjusted gross income, which can be challenging to reach when basing it off two salaries. Also, if you earn similar incomes, you may lower your tax obligations by filing separately, as this will prevent your combined earnings from placing you in a higher tax bracket.

Tax Advantages That Come With Marriage

If you decided to buy a house once you got married, you’ll receive a variety of tax deductions, including property taxes, mortgage interest, and mortgage points. Spouses may also give each other unlimited financial gifts without tax consequences. Additionally, when you’re single, you can only deduct contributions made to your own IRA account, but when you’re married, you get to deduct money put into your spouse’s IRA account, as well. 

For professional advice on how you and your spouse should file taxes, reach out to Simplified Tax in Sparta, WI. They’ll evaluate your finances thoroughly to figure out the best strategy for saving you money and increasing your refund. Backed by more than 30 years of accounting experience, you can count on them to provide accurate and personalized tax preparation, designed to meet your unique needs. Call (608) 269-2633 to schedule an appointment, or visit their website for more information on the services they offer.