Information on Filing Taxes Jointly
German philosopher Johann van Goethe once said, "The sum which two married people owe to one another defies calculation. It is an infinite debt, which can only be discharged through eternity." Around tax time, many people do not think about eternity; rather, they focus on the present, and how they can save money. Married couples have the option to file their taxes jointly, although they must decide whether joint filing benefits them.
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Eligibility
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The Internal Revenue Service allows married couples to file a joint tax return. However, as of 2011, the IRS defines marriage as being between a man and a woman. That means that same-sex couples can not file under the "married, filing jointly" status. The IRS does recognize common-law marriage provided that the state in which you reside also considers your union that way. Additionally, if your divorce is not legally finalized, the IRS still defines you as married.
Benefits
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Married couples can claim deductions and tax credits when they file a joint tax return. You have the right to take the earned-income credit, adoption expenses, or child and dependent care costs when you file jointly. As a married couple filing together, you can claim the child tax credit, which will be higher than if you file separately from your spouse. Moreover, when spouses decide not to file jointly, the amount of capital losses each partner can deduct is halved.
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Disadvantages
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The "married, filing jointly" status brings with it certain disadvantages. If one partner fills in incorrect or fraudulent information, both partners bear full responsibility. The IRS might withhold your refund check if your spouse has not paid child support or student loans. In addition, your unreimbursed medical expenses become more difficult to deduct when you file jointly. Also, filing separately benefits partners with miscellaneous itemized deductions.
The Best Choice for You
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What benefits one married couple does not benefit another when it comes to filing taxes. Everyone has different financial and personal circumstances, and it might turn out that filing jointly will not be the most cost-efficient option. Spouses should calculate whether they save more filing jointly or separately. Tom Herman, former tax columnist for The Wall Street Journal, recommends using tax filing software to determine which filing status will benefit the couple most.
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References
- Photo Credit arms of married couple image by Denis Babenko from Fotolia.com
