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Single, Married Filing Jointly or Separately: Which Should You Use?

Single, Married Filing Jointly or Separately: Which Should You Use?

Married people can file jointly or separately, depending on several life factors. However, unmarried people (not married by the last day of the tax year) who don't qualify for another filing status (head of household) are restricted to the single filing status. 

Single Filing Status 

An exception for unmarried people is a single parent with dependents or relatives. Exploring the HoH status can reduce your taxes. However, take note of the following:

  • Uncle Sam considers you unmarried for the entire year if you are divorced (legally) by the end of the year. Annulled marriages are also not considered valid, even if the filing status was joint for the previous years. 

  • If it crosses your mind to outsmart Uncle Sam by getting a divorce every year, filing single, and remarrying the following year, the IRS can enforce the married filing status on you.


Married Filing Jointly Status

When couples combine their credits, incomes, deductions, and exemptions, they can file a joint return. More than 95% of married couples file jointly. Once you agree with your spouse to file a joint return, you can choose the route even if you have no deduction, credit, or income. 

It is limited to married couples, and Uncle Sam considers couples as married for a whole year based on the following:

  • Married and living in the same place

  • The common law marriage of your state recognizes your marriage

  • Married and living apart, even though not separated 

  • You are living apart via an interlocutory divorce decree

People who lost their spouse and remained single in that year may file a joint return for the specific year. 

Married Filing Separately Status

Couples are not bound to file taxes together. Should any couples not agree to a joint status, filing separately is the way to go, or filing as a head of household if you qualify. This means individual reporting of your income, credit, deductions, etc. 

For couples living in a community property state, they need to split the income made by both parties as the expenses. An exemption applies if one party paid the expenses with their non-community funds. 

Couples need to know the many cons of using this filing route. This will help juxtapose the pros and cons. 

  • The route disqualifies you from many tax credits like earned income tax credits, Lifetime learning credits, etc. 

  • You are limited to $2500 to exclude from income with an employer’s dependent care program.

  • Deduction for interest on student loans, fees, and tuition deductions are not allowed.

  • People who stay with their spouse during the year must include income above 85% of any social security benefit they get.

  • There would be no rolling over of funds from your tradition to a Roth IRA if you and your partner lived together during the tax year.

  • You get reduced credits and deductions like child tax credits, itemized deductions, and retirement savings credits.

  • There is a $1500 capital loss deduction double for people filing jointly. 

  • Deduction of any loss from real estate you own or manage will be complex.

  • If your partner uses the itemizing route, you must also file using itemized deductions. However, you can use the standard deduction provided you want to claim half of whatever is allowed on the tax return. 

Which Status is Best for You?

Many married couples can save when they file jointly, especially when one partner earns a lot. The trick is that the joint status will shift the higher earner to a reduced tax bracket. 

For spouses whose income taxes are about the same, their tax rates will not differ. You can only know if you will pay more or less if you estimate your taxes in both ways. 



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