When it comes to filing taxes as a married couple, the most popular approach is a joint filing. Many financial experts recommend this, and some even go so far as to call a separate filing “the worst tax-filing status to claim.”
Is this true, though? Are there times when a separate filing makes sense?
If you’ve been wondering, “Should I file jointly or separately?” keep reading. Explained below is everything you need to know about choosing a filing status for your taxes.
Benefits of a Joint Filing
There are some specific benefits the IRS awards to married couples who file their taxes together. The primary benefit, though, is the qualification for certain tax credits.
Some credits you can claim include the following:
- Earned Income Tax Credit
- Child and Dependent Care Tax Credit
- American Opportunity Tax Credit
- Lifetime Learning Education Tax Credits
Joint filers, in most cases, also receive higher income thresholds. This allows them to qualify for certain tax benefits even at higher income levels.
Benefits of a Separate Filing
There are plenty of reasons why you might want to file with your spouse. There are benefits to filing alone, too, including these:
- Keep tax liability separate
- Keep student loan payments based on spouse’s income instead of your joint income
- Avoid having part of your tax return garnished to pay your spouse’s unpaid income tax or child support
It’s true that a joint filing can yield a higher tax return and more tax credit opportunities. Separate filing is not always a mistake, though, especially if one of the above situations apply to you.
Should I File Jointly or Separately?
The decision to file together or on a separate basis depends on a lot of factors. There’s not a clear approach that every married couple should take.
If both you and your spouse are high earners, it can sometimes make sense to file separate returns. A separate filing status also helps to protect you if you suspect that your spouse has been evading taxes, or if they have high student loan debt, high medical bills, or unpaid taxes or child support.
If none of these situations apply and you want a higher return, you might be better off choosing a joint filing status.
Tips for Filing Your Taxes
Whether you choose a joint filing or a separate filing, there are some key things you should keep in mind when getting ready to file your taxes.
For example, make sure you have all your essential documents at the ready. This includes W2s and other tax forms. Keep in mind, too, that, as Paystubs.net points out, it’s illegal to falsify a pay stub. Get legitimate copies of these documents from your employer before tax season rolls around.
Don’t be afraid to use a tax preparation software or hire a tax professional, either. This can help you avoid mistakes and penalties from the IRS.
Get Ready to File Your Taxes
As you can see, there are benefits to both joint filing and separate filing.
The answer to the question, “Should I file jointly or separately?” isn’t 100 percent clear. If you keep this information in mind, though, you’ll have an easier time deciding which approach is right for your family.
Do you want to learn more about the right way to file your taxes (regardless of your filing status)? If so, check out some of our other finance-related articles today.