When to Use Joint or Individual Tax Return?

Filing jointly may provide tax savings.
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Among the many perks of getting hitched are tax benefits you may enjoy when you file joint tax returns. In most cases, a married couple will benefit most by filing jointly. This is not set in stone, however, and there are some cases in which it is best to go your own way by filing individually.

Most Married Couples

In most cases, you'll get more bang for your buck if you file a joint tax return after you are married. You will typically enjoy more tax benefits this way. If you file an individual tax return, you will lose out on things like school loan interest deductions and dependent-care credits.

Child Support Debt

Child support debt may change things when the time comes to sign on the dotted line. If you or your spouse owes child support arrears, the Internal Revenue Service (IRS) can seize your joint tax return. In such a case, file separately to allow the spouse who doesn't owe child support the chance to receive a tax refund.

Old IRS Debt

When either spouse owes the IRS money from past tax returns, it's time to give some serious consideration to filing separately. The IRS will likely collect the money owed from the joint tax return. To prevent the innocent spouse from missing out in such a situation, file separately.

Business Income

If one spouse owns a business and the other one works a job, consider filing separately. Often, people who own businesses make mistakes in deducting expenses. Even when they get it all right, an audit is always a risk. The spouse with the paycheck will be held just as responsible as the business owner in such a case. The IRS may attach his paycheck to collect its money.

Unreimbursed Medical Expenses

If you or your spouse have a lot of unreimbursed medical expenses to deduct, you may be better off filing separately. You can only take this deduction if your medical expenses amount to 7.5 percent or more of your total income. Your total income on a joint return may be too much, but separately, one of you may qualify for the deduction.

The Trust Factor

To file a joint tax return, you must trust your spouse completely and fully understand her income and the deductions she wants to take. If you do not understand them or she is unwilling to share financial details with you, it's best to file separately. By signing your name to the income tax form, you are stating that you agree with everything listed within it.

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