If you got married this year, congratulations! As you navigate the many changes that come with this major life event, be sure to consider the tax implications involved. To help you avoid a headache in the coming tax season, we’ve answered some common questions to help you determine your new tax filing status.
Are my spouse and I required to file our taxes as a married couple?
If you are married on the last day of the tax year for which you are filing, you and your spouse must file as a married couple. In order to declare yourself married on your 2019 tax return, you must be married before January 1st, 2020.
What is the difference between married filing jointly and married filing separately?
You and your partner can choose to file a joint tax return or to file your taxes separately.
Married Filing Jointly: Filing a joint tax return allows couples to record their respective incomes, exemptions, and deductions on the same tax return. In most circumstances, filing jointly results in a larger refund or a lower tax bill. For this reason, most married couples elect to file a joint tax return.
Married Filing Separately: In some instances, it may benefit a married couple to file separately. A couple may choose to file separate tax returns if one spouse has prior debt that is past due such as child support, student loans, or a tax liability incurred before the marriage.
Other reasons to file separately include separation, a divorce in process, or a significant difference in income levels between two spouses.
In some cases, one spouse may file as head of household. For more information about eligibility for this filing status, contact your tax professional.
How does my choice of filing status affect which tax credits and deductions my spouse and I can claim?
The tax credits and deductions available to a married couple are largely determined by their choice of filing status.
Taxpayers have a choice between itemizing tax deductions or taking the standard deduction; under the married filing separately filing status, both partners must make the same choice. Even if it would benefit you to itemize but your spouse would do best to take the standard deduction, you and your partner cannot choose both. There are also restrictions on the types of deductions and tax credits taxpayers can claim when filing separately.
One of the primary reasons most couples choose to file jointly is that the married filing separately status requires taxpayers to forfeit certain tax credits and deductions.
Some of the credits and deductions available forfeited by couples who file separately include:
Filing separately also means forfeiting a number of deductions and credits relating to education, such as:
My spouse and I aren’t sure which tax filing status to choose. How can we determine the best filing status for our financial situation?
Ask an accountant! Contact your friendly neighborhood tax preparers at Seymour & Perry, LLC for help with all of your tax-related needs.
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