When you’re married, you have the option of filing taxes separately or jointly. While separate filing can have advantages in limited situations, most couples will find that filing jointly is more effective at lowering their total tax liability. If you’re recently married—or are thinking about it—here are a few of the benefits of submitting a joint tax return.  

5 Tax Benefits of Filing Jointly as a Married Couple

1. Simpler Filing Requirements

Couples who file separately will have to double their tax preparation efforts to file two returns. If you’re looking to save time and paperwork, married couples filing jointly only have to submit one return that combines income information. With only one return, you may find that your preparation takes less time and can cut your total expenses for professional tax services.

2. Income Bracket Balancing

How much you owe to the IRS is determined by what income bracket you fall under. If you’re a high earner and file single, you will have to pay a higher percentage toward your bill. However, if you file jointly with a partner who earns a lower amount, you can combine incomes and qualify for a lower rate.

3. Unrestricted Gift Giving

When married couples file separately, any money one partner gives the other may be taxed as a gift. For example, cash gifts totaling more than $15,000 in 2019 would be subject to taxes. By contrast, those who file jointly can gift money to each other without any tax liability.

4. Lower Balance With Losses

Financial losses from one partner—such as those related to business ownership or medical expenses—can lower the amount a couple owes, even if the other spouse had a positive income. However, this benefit only applies when filing jointly. If you were to submit separate tax returns under the same circumstances, only the lower-earning partner would experience a decreased liability.  

5. Increased Deduction Opportunities

Many deduction opportunities are increased for couples who file jointly as opposed to separately. For example, the deduction limits are higher for charitable giving and gains in home value. It’s also possible to claim a higher American Opportunity Credit for education expenses.

Navigating tax benefits as a married couple doesn’t have to be challenging when you prepare your return with Tudor Wilson & Associates CPAs.  Offering personalized tax services in Honolulu, HI, this team of certified public accountants will determine which filing status is most advantageous to your situation and identify ways to maximize your savings. For more details on these capabilities, visit this Oahu accounting firm online. To schedule a convenient consultation to discuss your tax return needs, call (808) 592-2000.