Once you tie the knot, you are no longer eligible to choose “single” as your filing status (unless you end up legally divorced or separated under state law, that is). Hitched-up couples can choose to file jointly or separately and, for the most part, married tax payers who file jointly pay the lowest amount of federal income tax. Single filers and married couples who file separately tend to pay higher tax rates – but they also tend to argue less over what to watch on Netflix, so it all evens out in the end.
Is It Better to File Taxes as Single or Married?
Even if you meet the IRS's definition of marriage on December 31 of the tax year, as far as the IRS is concerned, you’ve been married for the entire year. And that's lucky for you, because across the board, the lowest tax rate is for married couples who file jointly. Couples enjoy marriage tax benefits like a higher standard deduction and often qualify for perks like the Earned Income Tax Credit, American Opportunity and Lifetime Learning Education Tax Credits, exclusions for adoption expenses and the Child and Dependent Care Tax Credit more easily than single taxpayers. Likewise, couples enjoy more robust IRA contribution deductions and deductions on student loan interest, as well as higher capital loss deduction limits.
Exceptions to the Rule
Choosing your filing status – single vs. married – isn't a complete no-brainer; before you simply check the “married filing jointly” status because you think you'll pay the lowest rate, figure your taxes both ways. When you combine incomes to file jointly, you may be pushed into a higher tax bracket, a situation known as a "marriage penalty." Some newlyweds discover that they have not withheld enough federal tax on their paychecks and owe money at tax time. Additionally, when you combine incomes, you increase the threshold at which you’ll qualify to itemize most of your deductions (which, to be fair, have been drastically reduced or eliminated for many earners in the 2018 tax year). As a married couple, run the numbers for both filing statuses and choose the one for which you’ll pay the least tax overall – you can get a full breakdown of 2018 tax brackets via Tax Foundation, including single vs. married tax brackets.
If you or your partner paid sizable out-of-pocket medical expenses, filing separately may be beneficial as for years 2017 and 2018, you can only deduct the amount of those costs that exceed 7.5 percent of your adjusted gross income – a higher join AGI can reduce the money you save in this case.
Filing for Tax Year 2017
For the 2017 tax year, single taxpayers could claim a standard deduction of $6,500, while those filing a joint return were eligible for a standard deduction of $13,000. If you were married with kids in 2017, you could also claim a dependent exemption, usually worth up to $4,050 per child.
Filing for Tax Year 2018
The standard deduction sees a big rise across the board in 2018; single taxpayers get a standard deduction of $12,000 while joint taxpayers enjoy a standard deduction of $24,000. Married taxpayers who earn $600,000 and up are subject to the new 37-percent top tax rate.
If you filed separately to reduce taxes on medical expenses, remember that starting in 2019, you'll only be able to deduct the amount of the total unreimbursed allowable medical care expenses for the year exceeding 10 percent of your adjusted gross income.
For married parents, it's worth noting that while the dependent exemptions are no longer available, the the Child Tax Credit has doubled to $2,000 per child.
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