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The Advantage of Filing Married Taxes Jointly

The Advantage of Filing Married Taxes Jointly

Many married couples prefer using the joint filing status to file tax returns. In essence, you or your spouse can file the tax return. Married couples using the joint filing status can report their individual incomes, deductions, exemptions, and credits on the same tax return. The status is suitable for a marriage where one spouse makes the income or the bigger portion. But in a case where both are marking large and unequal income and itemized deductions, filing separate taxes will be beneficial. 

This article explores some pros of filing taxes jointly:

1. Attracts lower tax rate

Couples using the MFJ method get lower tax rates compared to when filing separately. In addition, there are other tax benefits that only couples filing jointly can participate in. However, before filing jointly, check your tax rate, income, qualified deductions, and your credits.   

2. You earn more credits and deductions

Filing joint taxes qualifies you for certain tax breaks like the Earned Income Tax Credit, the American Opportunity Credit, and the Lifetime Learning Credit for education expenses which are not available to married filing separately. In addition, couples filing separately also miss the opportunity to deduct student loans. Furthermore, you'll also miss dependent care credit if you use a separate tax filing status. But you can claim the breaks if you're legally separated or live apart from your spouse.

Married couples filing jointly also benefit from the tax credit for qualified adoption expenses. The breaks come with exceptions for spouses that live apart from their spouse but meet other requirements. Additionally, you can enjoy the adoption tax credit from way back if you qualified and filed a joint return when the credit was enacted.

3. You can contribute to a Roth IRA

The scheme allows you to add money to your Roth IRA. Couples filing jointly can easily reach the threshold to qualify for Roth IRA contributions. You can contribute to your Roth IRA account if your modified adjustable gross income is less than $208,000 for 2021 and $214,000. However, if you're married and living with your spouse during the tax year and earn less than $10,000, you can contribute to a Roth IRA account.

4. Filing jointly is less complicated

Another advantage of joint tax filing is that it is straightforward, unlike the separate tax filing method, which has certain steps to follow. For example, only one spouse can claim a child or dependent deductions when filing separately. Additionally, you must agree on the method of filing, whether standard or itemization. 

Married Filing Jointly Requirements

  1. If you marry on December 31, the last day of a tax year, the IRS considers you married for the tax year. If you divorce or are legally separated on December 31, then you're considered unmarried for the tax year. The only exception to this rule is the death of a spouse.

  2. You and your spouse must agree to use the joint status.

However, the method requires you to make certain calculations to figure out if jointly makes more sense than filing separately. Additionally, you can be considered unmarried under certain conditions if you didn't get a divorce or legal separation before December 31. Such as;

  • Suppose you live apart from your spouse for more than six months during the tax year. However, living apart does not include business, medical care, school, or military service.

  • You use a different filing status from your spouse's.

  • You are responsible for paying more than half of the home expenses during the tax year.

  • Your child, stepchild, or foster child spends more time in your home during the tax year.

The bottom line is married people using the married filing jointly status (MFJ) benefit from tons of tax breaks. Additionally, the method is straightforward and requires one spouse to file before both signs.