If you’re married and you have two incomes, your joint income may now bump you up to a higher income tax bracket. Because of this, you may realize a higher income tax benefit by filing married jointly instead of filing separately. Each couple’s situation is different, however, so it’s nice to have the option of filing either way.
Income Tax Filing Statuses
The IRS offers taxpayers a choice of five different income tax filing statuses. You may qualify for more than one status, and your status may change from time to time. Still, you must choose only one status each year from this filing status chart:
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er) with Dependent Child
If you’re married with two incomes, you’ll typically choose between numbers two and three above. Under certain circumstances, you may be eligible to file as head of household instead of filing status single. Head of household is generally a filing status reserved for single or unmarried people. This filing status may also apply to certain married taxpayers who live apart from their spouses for the second half of a tax year and maintain a household for a dependent child.
Married Filing Jointly Vs. Separately
In the eyes of the IRS, “married” means that you were married as of the last day of the tax year. This means that even if your marriage didn’t take place until Dec. 31, you are considered married for the entire year. This gives you the option of filing a joint or separate tax return, but you can only file a joint return if your spouse also agrees to file this way.
If you separated from your spouse during the year, but you were still legally married on Dec. 31, you’re still married for tax purposes. You may also be able to file a joint return if your spouse died during the tax year.
If you choose married filing jointly, you and your spouse share a combined tax liability. But if you choose married filing separately, you and your spouse are each responsible for your individual tax liabilities.
2019 Increase in Standard Deductions
From year to year, the IRS adjusts the standard deduction amounts for inflation. For tax year 2019, the IRS allows a standard deduction for married joint filers of $24,400, and $12,200 for married filing separately. You’ll use these deductions for your 2019 tax return that you’ll file in 2020.
Some Advantages of Filing Jointly
If you’re married and you file a joint return with your spouse, you’ll have these benefits available if you qualify:
- Your tax rate may be lower than if you file a separate return from your spouse.
- You’ll be able to take the earned income tax credit.
- You’ll be able to take the adoption tax benefit.
- You’ll be able to claim education tax benefits, including the lifetime learning credit, the student loan interest deduction and the American opportunity tax credit.
- You can take a deduction up to $3,000 for capital losses (compared to a $1,500 deduction if you file a separate return from your spouse).
Figure Taxes Different Ways
If you're eligible to file your tax return under more than one filing status, you may be unsure of which is actually the best option. If you've recently been married, you may find a world of difference between filing your return as single and filing as married with two or more incomes. The IRS recommends figuring your return both ways and choosing the filing status that results in paying the lowest taxes. In fact, the IRS also notes that choosing the correct filing status may mean that you won’t even have to file a return.
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.