Should I File Jointly with My Spouse? Carmichael Hill

Although many couples may stand to benefit from filing their taxes jointly, doing so may not always be the most suitable choice. Therefore, it is essential to consider the following things when filing taxes as a married couple:

  1. See if you are eligible to file jointly: Being married by December 31st of the relevant tax year is a prerequisite for joint filing. For instance, if you are planning to file jointly for 2022, you must have been married by December 31st, 2022. Note however that not all states require a marriage certificate for a legally binding marriage. Eight states still allow new common law marriages, though the specific requirements vary from state to state. The IRS will accept your joint return so long as you have a legally valid marriage in your state by 12/31 of the relevant tax year. [1]
  2. Determine your deductions and credits: Couples who are married and file for taxes separately cannot make use of several deductions that may lower their tax bill or result in higher refunds. For instance, filing separately disqualifies you from claiming deductions such as student loan interest, tuition and fees, education credits, and earned income credits. [2]
  3. Consider what you will be itemizing: If you are filing separately and one partner decides to itemize their tax return, then both partners are required to itemize. [3] Typically, itemizing is only advantageous if you can deduct more than the standard deduction. Therefore, unless both partners can benefit from separate itemization, filing separately may not be the best choice. However, if one partner has substantial deductions (such as a significant medical bill that exceeds the standard deduction) and they are in a low tax bracket, it may be more beneficial to file separately.[4]
  4. Higher income thresholds: If there is a significant difference in the income earned by married partners, filing a joint tax return can be beneficial. Married tax brackets are typically calculated based on values that are roughly two times higher than single tax bracket values. This means that an unmarried individual earning $44,726 in 2022 annually is subject to the same tax rate as a married couple earning $89,541. [6] However, since most households do not have equal incomes from both partners, joint filing can sometimes result in a lower effective tax rate if there is a disparity in income.

    For instance, if one spouse earns $8,000 annually and the other earns $55,000 annually, filing a joint tax return would result in a marginal tax bracket of 12%. However, if they filed separately, the spouse earning $55,000 would be in the 22% marginal bracket. [5]

Tax law is complicated, though there are professionals who can help you in determining the most suitable choices for your circumstances. Please contact us for a complimentary evaluation of your financial situation or for introductions to tax and legal professionals.

 

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