Once you tie the knot, you are no longer eligible to choose “single” as your filing status. Married couples can choose to file jointly or separately. 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 pay the highest tax rates.
The IRS is very clear on its definition of marriage: “A marriage means only a legal union between a man and a woman as husband and wife.” Also, if you meet this definition on Dec. 31, as far as the IRS is concerned, you’ve been married for the entire year. When it comes time to file your taxes, you must choose between married filing jointly or married filing separately.
Tax Rates and Deductions
Across the board, the lowest tax rate is for married couples who file jointly. The tax rate for couples who file separately is the same as the single rate until you earn just over $68,500. At that point, if your filing status is married filing separately, you will pay the highest tax rate. The standard deduction is not impacted. In 2018, the standard deduction for joint filers was $12,600, exactly twice that of single or married-filing-separately taxpayers.
In addition to the lowest tax rate, those who file jointly can take advantage of many other benefits. These include the Hope and Lifetime learning credits, dependent and child care credits, adoption expense credit, and the deduction of qualified education loan interest. These credits lower your tax bill. Single taxpayers are entitled to them, but married couples who file separately are not. On the other hand, single and married-filing-separately taxpayers can be held liable for only the taxes, penalties and interest that they themselves incur. If you file jointly and your spouse make an error or takes an unwarranted deduction, you’re on the hook as well.
Before you simply check the “married filing jointly” status because 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. 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. As a married couple, run the numbers for both filing statuses and choose the one for which you’ll pay the least tax overall.
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