Marriage and Filing Your Federal Tax Return

By Stephen Fishman, J.D., University of Southern California Law School
Learn the pros and cons of filing your tax return jointly or separately as a married couple.

The IRS offers married taxpayers two tax return filing options: filing jointly or filing separately. Filing a joint tax return with your spouse almost always results in lower taxes. That's why the vast majority of married taxpayers file jointly. However, in fairly rare cases, a married couple can cut their tax bill by filing separately. Filing separately might also be a wise choice if you think your spouse is a tax cheat or owes the IRS money. You and your spouse will want to decide whether the benefits of filing a joint return outweigh the drawbacks.

Filing a Joint Return

Only married taxpayers may file a joint return. You are considered married for the entire year if you were married by December 31. When you file a joint return, you and your spouse combine your incomes, credits, and deductions.

Some things are no different whether you file jointly or singly. For example, when you file jointly you usually pay income tax at the same rate as filing singly. This is because the tax bracket income thresholds for married couples are exactly double those for single taxpayers, except for the top bracket. Likewise, you do not get a larger standard deduction by filing jointly because the standard deduction for joint returns is exactly twice as large as for single filers.

Nevertheless, the total tax liability of you and your spouse will usually be lower if you file jointly than if you file separately. Filing jointly enables you to take full advantage of many tax credits and benefits that aren't available to couples who file separately. And there are other advantages as well.

The main advantages of filing a joint return are:

  • There's less cost and time to complete one joint return than two separate ones.
  • A married person who files a joint return is allowed to contribute to an Individual Retirement Account (IRA) even if that person doesn't work.
  • Certain credits and adjustments are generally not available if you're married but choose to file separate returns. However, they're available if you file a joint return with your spouse. Examples include Affordable Care Act (Obamacare) tax credits to help pay for your health insurance, the child and dependent care credit, adoption expense credit, Hope and Lifetime Learning credit, and deduction for qualified educational loan interest.
  • If you or your spouse receive Social Security benefits, a smaller portion is subject to taxation if you file jointly than if you file separately.

The main disadvantages of filing a joint return are:

  • Signing a joint return obligates you to accept full responsibility for the information contained in your tax return as well as for any errors and omissions. This means you may be held individually responsible for the taxes, penalties, and interest that result from your joint tax return. However, you can claim "innocent spouse relief" and avoid liability if you can show the IRS that any underpayment tax was due to your spouse and you didn't know about it when you signed the joint return.
  • Your refund can be withheld by the IRS to pay your spouse's financial obligations, such as unpaid child support or student loan default.
  • You're less likely to be able to deduct unreimbursed medical expenses. This includes the expenses not covered by your insurance plan.
  • When you file jointly, you and your spouse are limited to a single $10,000 deduction for state and local taxes; by filing separately, each spouse can claim a $10,000 deduction.
  • High income spouses who file jointly pay income tax at a 2% higher rate on the first $400,000 they make over $600,000 in taxable income--a maximum $8,000 marriage penalty.

Filing Separate Returns

If you're married, you and your spouse may choose to each file a separate return. When you file separately, you and your spouse each report only your own income, credits, and deductions on your individual returns. If you live in a community property state, the income you and your spouse earn is split evenly between you, as are your expenses. When filing separate tax returns, both spouses must use the same system for claiming deductions. If one spouse itemizes, the other must itemize too. This is true even if a spouse will pay a lower tax bill by taking the standard deduction.

The main advantages of filing separate returns are:

  • You won't face liability for taxes owed by your spouse--this is by far the number one reason not to file jointly.
  • Your refund won't be withheld by the IRS to repay your spouse's financial obligations.
  • You and your spouse can each deduct $10,000 in state and local taxes on your separate returns.
  • It can be easier for a spouse to deduct unreimbursed medical expense. Such expenses are deductible only if they exceed 10 percent of your adjusted gross income (AGI) for 2019 and later (7.5% for 2018). By filing separately, the deduction will be based on one spouse's income making it easier to cross the threshold.
  • By filing singly, high income spouses who earn over $400,000 pay tax at a 2% lower rate on the first $400,000 they make over $600,000 in taxable income.

The main disadvantages of filing a separate return are:

  • You give up valuable tax breaks, such as education credits, the child care tax credit, interest deductions on student loans, the Affordable Care Act (Obamacare) tax credit for health insurance.
  • If you live with your spouse at any time during the tax year, you’ll have to include in income more (up to 85%) of any Social Security benefits you receive.
  • It's harder to save for retirement because you won't be able to contribute to a deductible individual retirement account for your nonworking spouse if you file separately.
  • Couples who file separately can't roll over a traditional IRA to a Roth IRA. In addition, the income eligibility limits for Roth IRAs are much lower for couples who file separately. This may limit your options for saving for retirement.
  • Your capital loss deduction limit is $1,500 (instead of $3,000 if you filed a joint return).
  • You give up some flexibility in managing tax matters. For example, you and your spouse won't be able balance out the profits and losses on your investments as you can on a joint return.

For most couples, filing jointly is a no brainer. However, there are times when filing separate returns may work better for you and your spouse. The best approach may be to calculate your tax separately and jointly to determine which method will result in the lower combined tax. If you have questions about your individual tax situation, you may want to consult an experienced tax attorney.

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