What Are The Advantages Of Filing Joint Tax Returns?
When a married couple has two separate incomes, they have the option of filing their taxes together or filing them separately. While there are benefits of filing separately, many married couples prefer to file their taxes jointly instead. This may save some time if you are meeting with an accountant to have your taxes filed and it may also be a bit cheaper to file your taxes jointly instead of having two separate appointments. Here are some more advantages that married couples receive when filing their taxes together.
Paying Less Income Taxes
Married couples commonly pay less income taxes when they file jointly than when they file separately. The amount of income taxes that you pay depends mainly on which tax bracket you fall into. However, the tax brackets are different for married couples who file jointly than for those who file separately.
This is due to married couples who file jointly having certain deductions that those who file individual taxes do not. By filing separately, you may fall into a higher tax bracket sooner which will require you to pay more taxes than you will if you file jointly.
When married couples file their taxes jointly, they normally have several more tax breaks than those couples who file separately. This includes the earned income tax credit, child and dependent care credit, elderly and disabled credit and several different educational credits as well. Married couples who file separately usually are not eligible for these tax credits.
Better Filing Options
When filing a joint return, married couples have the choice of itemizing their deductions or taking the standard deduction depending on which will save them the most on paying their taxes. However, when filing separately this is not always an option. If one spouse has substantially more income than the other, that spouse may be forced to itemize. If one spouse itemizes instead of taking the standard deduction, the other spouse cannot take the standard deduction when filing taxes.
Higher Income Tax Return Amounts
With the different tax brackets, more tax breaks and better filing options, this also means that married couples who file jointly often get back higher tax return amounts than those who file separately. When a married couple files separately, it is possible that both of them will have to pay taxes instead of getting a return.
To decide which method of filing taxes is best for you and your spouse, it is a good idea to use an online calculator to determine the benefits of each before filing your taxes. This will give you a good idea of how much you can expect to pay or get back from your taxes by filing jointly or filing separately. For more information, talk to a professional like HBE Becker Meyer Love LLP.