This article was last edited on December 23, The information is up to date through tax year returns filed in Your married clients have a choice when it comes to filing their taxes. They can either file as: Married Filing Jointly MFJ — combined together on one tax return, or Married Filing Separately MFS — each files his or her own tax return Whether they wed on January 1, December 31 or anytime in between, newlyweds and everyone who is legally married are eligible for several tax breaks if they file their taxes jointly.
MFJ vs. Filing joint typically provides married couples with the most tax breaks. Another reason to consider filing together is that joint filers are often eligible to receive meaningful savings in the form of tax credits, such as: The Earned Income Tax Credit EITC , which is designed to "benefit for working people with low to moderate income. The American Opportunity and Lifetime Learning Education Tax Credits , which reduces the amount of taxes owed by those who are attending college, or have a spouse or child with college or graduate school tuition costs.
Reimbursement or refund for adoption expenses when legally adopting a child. The Child and Dependent Care Tax Credit , which can help offset your child-care costs if you are working and must pay a caregiver to look after your child so long as they're younger than 13 or a disabled spouse.
VIDEO Nearly a third of millennials would end a relationship for a raise. Make It. Here are four situations where filing separately would be the better option: 1. Here's when couples should start having tough conversations about money. Don't miss: Want a happy marriage? The best way to figure out whether married filing jointly or married filing separately will benefit you the most is to prepare your returns both ways. Then, choose the filing status with the lowest net balance due or refund.
If you choose married filing jointly, both of you can be held responsible for the tax and any interest or penalty due. One spouse might be held responsible for all the tax due — even if the other spouse earned all the income. With all this in mind, most married taxpayers file a joint return, both for the savings it provides and for convenience.
Looking for information on Alabama state income tax? The Legal Side of Marriage. Marriage and Taxes. Key Takeaways Though most married couples file joint tax returns, filing separately may be better in certain situations. Couples can benefit from filing separately if there's a big disparity in their respective incomes, and the lower-paid spouse is eligible for substantial itemizable deductions.
Reasons to file separately can also include separation and pending divorce, and to shield one spouse from tax liability issues for questionable transactions.
Filing separately does carry disadvantages, mainly relating to the loss of tax credits and limits on deductions. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Common-Law Marriage: What's the Difference?
Partner Links. A joint return is a U. Married filing separately is a tax status for couples who choose to record their incomes, exemptions, and deductions on separate tax returns.
0コメント