Tax Questions for Married Filing Together
For married taxpayers that want to file a joint tax return, you may have several questions on how to go about filing together. The Internal Revenue Service, or IRS, offers many tax-reducing benefits that only married couples qualify for. However, certain drawbacks arise when filing a joint return with your spouse.
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Joint Return Requirements
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Prior to delving into any of the pros and cons of filing a joint return with your spouse, you must first ensure that you satisfy the requirements to file together. The IRS requires that you be legally married at the end of the tax year and that marital tax deduction only applies to marriages between a man and woman. The IRS also requires that you and your spouse consent to the filing of a joint return. When you and your spouse both sign the tax return, the IRS will infer consent by both spouses.
Saving Income Taxes
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On the upside of filing a joint tax return, you and your spouse can save more in tax than other filers. First, you can claim two exemptions on your return, which reduces your taxable income in the same way a deduction does. If you choose not to itemize your deductions, then you can claim the largest standard deduction available, which is $11,600, at the time of publication. When you compare this to the $8,500 standard deduction a head of household filer can claim, the tax savings can be substantial. The most beneficial tax benefit is the lower income tax rates that more of your joint income is subject to, regardless of who actually earns the income. This is because each of the six tax brackets will impose separate rates of tax on different portions of your income. When filing jointly, the tax brackets include wider ranges of income than for other statuses, which results in lower rates.
Responsibility for Taxes
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Although you can save a significant amount of money in income tax by filing jointly as opposed to separately, you are each fully responsible for any tax debts you accumulate together. To illustrate, suppose you and your spouse underpay your income tax by $25,000 one year. The IRS has the authority to collect the tax from either one of you. This means that if your wife disappears one day and the IRS can't locate her, you are responsible for paying the entire $25,000 debt.
Erroneous Tax Reporting
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Problems can arise when one spouse has more control or knowledge over the household finances than the other. This occurs when one spouse intentionally reports erroneous deductions and credits on a return, purposefully omits taxable income or uses any other illegal method to mislead the IRS and lower your joint tax bill. In this situation, the IRS does provide protections for an innocent spouse who is unaware of the inaccuracies; however, you will have to spend time documenting your case and proving your innocence to the IRS.
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