Congratulations! You’ve just tied the knot. You’re unwrapping all the gifts you received now that you’re back from your honeymoon, and you’re starting your lives together under one roof.
April rolls around, and it’s time to file taxes. You see a little checkbox for married (how cute?!), but you see there are more options:
Married Filing Jointly
Married Filing Separately
How do you know which option to choose? We break down some reasons couples choose one particular status over another.
Reasons to file jointly
- Standard deductions—the IRS offers one of the biggest standard deductions each year to those who file jointly. In 2019, the deduction was nearly double for those filing jointly over separate.
- Tax Credits—There are certain credits available only to those who file jointly, especially for those who have children.
- Convenience—When filing separately, preparing your tax return requires more documentation. When more documentation is necessary (such as when one spouse has to itemize), you can expect a higher bill from your firm as well.
Reasons to file separately
- Keeping assets separate—if you and your spouse want to keep your assets or property separate, you should also file separately.
- Anticipating divorce—not all marriages will last forever. If you are anticipating a divorce and/or separation of assets and liabilities, it’s best to file your taxes separately.
- Student loan options—payment plans for student loans are often determined by income status. It may be in the payee’s best interest to file separately depending on the recorded salary.
We suggest consulting with your CPA for further questions on your filing status. We know each couple’s circumstances vary, and we are here to navigate and solve any challenges or questions that arise.