Whether you and your spouse are filing your taxes yourselves, or consulting a tax professional, you may want to ask yourselves some questions at the outset to make the most of the credits and deductions coming to you. Even if you have already decided to file jointly, you may nonetheless want to run the figures separately, just in case.
Run the Numbers
While some married couples benefit from filing jointly, others could end up with the short end of the stick or just pay the same amount in taxes as filing separately. There's no way to tell for sure until you run the numbers, so pull out all your paperwork and do a trial run before you actually file anything to see whether filing separately or jointly makes a difference. Filing jointly could push you into a higher tax bracket due to combining incomes, or put you into a lower bracket if one person makes substantially less.
Deductions and Credits
Getting married opens up a whole new world of deductions that weren't available or were less plentiful when filing as a single person or as married-filing-separately. Not only do you count two personal exemptions, for a standard deduction of $12,400 in 2014, but you may also claim dependent standard deductions, which as of 2014 are $3,950 per child. In addition, married-filing-jointly may be entitled to the child and dependent care credit, adoption expense credit, Hope and Lifetime Learning credit and deductions for qualified educational loans.
You may also want to determine whether itemizing deductions or taking the standard deduction results in a larger deduction. As tax preparation company H&R; Block notes, many married couples tend to itemize because when itemizing such things as mortgage interest, the deductible total works out to be greater than the default standard deduction. Other things to factor in that might make itemizing more favorable are real estate and personal property taxes and charitable gift contributions.
Marriage Penalty and Bonus
Similar to the first question, this question deals with the penalty that sometimes occurs when married couples file taxes together and end up paying more tax than single filers. The policy analysis organization Tax Policy Center says more couples see a marriage bonus, or tax break, as opposed to a penalty, while the Tax Foundation says the middle class is more likely to get a bonus. In the event of a marriage penalty, you may discover that your combined incomes disqualify you for an Earned Income Tax Credit, but in a different scenario, that same credit could be enlarged by including both incomes.
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