I Got Married This Year…Should I File Jointly?

Congratulations, you are officially married! After you spend time basking in your newlywed bliss, it’s time to start thinking about the logistics of what it actually means to be married. Most importantly, you will need to figure out how you will handle your taxes moving forward. For married couples, you have two choices: you can file married jointly or file married separately. For most, filing jointly will have positive effects, and most couples will, and should, choose this option, but there are a few situations where it may not be your best choice. Here are the pros for filing jointly, and the reasons to file separately.

What it means to file jointly

Simply, filing jointly means that you and your spouse will now file one tax return, rather than two separate returns. On the joint return, you will include both of your incomes and both of your deductions, along with any dependents or exemptions. You will receive one refund, or one bill if you owe money, and be held to the same payments and penalties.

When couples file jointly they are able to receive tax deductions that they wouldn’t qualify for if filing separately. These deductions can make a huge difference in the amount you owe or the amount of refund you receive. In addition, filing separately will also mean lower IRA contribution deductions allowed, losing the ability to take a deduction for student loan fees or tuition, and will lower the amount of the capital loss deduction limit from $3,000 for joint filing to $1,500 for separate filing.

Reasons to not file jointly

If you are legally married, there are only a few circumstances where it may make more sense for you and your spouse to file separate returns.

  • You have a lot of medical expenses: if you or your partner have a hefty amount of out-of-pocket medical expenses, it may work in your favor to file separately. You are only allowed to deduct the medical expenses that exceed 7.5% of your adjusted gross income. If your spouse has a high adjusted gross income, it will be harder to deduct all of your expenses. If you are using just one income for your return, it is more likely that you will be able to get the full deductions for medical expenses, assuming your sole income doesn’t exceed the limits.
  • Your partner has a lot of tax debt: If your spouse has a lot of tax debt or is already in trouble with the IRS, filing jointly will put you on the hook for those tax troubles as well.
  •   You are separated: If you currently live apart, are separated, or are planning for divorce, keeping your finances separate can be difficult. The best thing to do in this situation is to file separately as soon as you decide you will be apart.

These are just a few reasons to file jointly or separately. If you are recently married, recently separated, or have complicated taxes, contact a tax professional like Levy & Associates to help. You can contact us at 1-800-TAX-LEVY or visit >our website to learn more.

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