One of the fastest ways to mess up a tax return is to claim the wrong filing status. Last week provided an overview of the pros and cons of tax filing statuses. But this week, let’s zero in on the best choice for married couples.

Understanding the Options

Married couples have two basic filing options: Married Filing Jointly (MFJ) or Married Filing Separately (MFS). Each option has its advantages and disadvantages, and it’s crucial to evaluate your unique financial circumstances before deciding. Let’s see why you might choose one over the other.

Choosing MFS status

There’s an old saying that all is fair in love and war. You could almost say the same for filing taxes. There are simply times when things get rocky in a marriage, but that doesn’t mean you have to suffer when filing your income tax return. In fact, difficulties like divorce were the reason the MFS status was created. And filing that status might be a valid option if someone finds themself in that circumstance at tax time.

Another reason to file MFS status is if you suspect your spouse of tax evasion. As mentioned last week, married couples are on the hook for tax liability if they file jointly. MFS status keeps things separate and keeps you from paying for crimes you didn’t commit.

But MFS status isn’t always used because of a failing relationship or a sneaky spouse. Sometimes it just makes economic sense. For example, let’s say one spouse earns $300,000 per year. The other makes $40,000 annually and had unreimbursed dental work exceeding 7.5% of their adjusted gross income. In that case, itemizing deductions could provide more economic benefit than taking a standard deduction.

So, if your income varies wildly from your spouse’s, and there are potential itemizable deductions like medical or dental expenses, MFS could be the way to go.

Remember that MFS filing is complex, no matter the reason for using it. And it can potentially lead to higher tax brackets. So, you’ll want to consult a tax professional if you take this option.

The MFJ option

If all is well in your marriage and there aren’t factors like income disparity and potential deductions exceeding 7.5% of your adjusted gross income, then MFJ is probably the best option. It’s also the most common because it is simple compared to MFS and reduces the chance of mistakes. It generally results in better tax bracket placement, which means your tax rate will probably be lower.

Resources for making an informed decision

So how do you decide? The first route is to self-educate. IRS Publication 17 is a good place to start. It provides detailed information on filing status options. Of course, IRS publications aren’t exactly light reading. So, consulting with a trusted tax professional is the faster option.

Take the time to do it right, no matter what route you choose. Getting your filing status correct is not only foundational, but also critical. So, examine the pros and cons of each to reach a decision that keeps you safe and maximizes your tax benefits.