If your household produces just one income, you receive indirect benefits from the IRS. In effect, your standard deduction often goes when it reduces one income as opposed to two. You also still benefit from various tax credits the IRS bestows upon married couples in a given tax year. This, however, is typically only the case if you use married filing jointly status. In general, you'll probably proceed as normal even if one spouse is not employed.
Determine the most beneficial filing status. In most cases, you should still use married filing jointly status. Since only one spouse is working, this filing status positively and profoundly impacts your household's taxable income. The working spouse receives twice the standard deduction, which reduces the taxable income dollar for dollar, she would receive when filing single or separately. Using the married-filing-separately status provides benefits in very few situations. Generally, its impact is negative on married couples; it slashes your standard deduction and disqualifies you for several tax perks and credits, such as the Earned Income Credit.
Gather your W2s, 1099s and other forms that include income you earned during the tax year. If the nonworking spouse earned income from a source other than a job -- things like interest, dividend income, capital gains, disability or unemployment -- you must report it. The IRS might tax your household on some of these types of income, depending on your specific financial situation. Other than the filing-status consideration, which affects very few people, there is little to consider just because one spouse is not employed.
Don't claim the nonworking spouse as a dependent of the working spouse. Simply put, the IRS doesn't allow this. Nice try, though.
File your taxes as you normally would. Ensure that both spouses sign the return. If you file electronically using tax software, you'll be prompted to use electronic signatures or print your return to sign and send in. If you use a paid tax preparer, he will show you were to sign ahead of assembling and delivering your report to Uncle Sam.
- You'll need to assess the particulars of your situation, but there are times when using the married-filing-separately status produces tax benefits. As Kay Bell of Bankrate explains, if one spouse has significant medical expenses, she might hit the IRS threshold for itemizing medical costs. Bell also notes that filing separately can provide a spouse more protection from the IRS if the other spouse employs "questionable tax-filing techniques." The status can also make it easier to sever ties in the aftermath of a pending divorce.
- You do not have to claim child support payments received as income, but the IRS considers alimony payments taxable income.
As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. His work has appeared on SFGate and Planetizen and in the journals "Environment & Behavior" and "Health and Place." Pendola has a Bachelor of Arts in urban studies from San Francisco State University.