Pros And Cons Of Filing Jointly
For most couples, filing jointly has the most benefits. Here are a few reasons to file your taxes together:
Youll have a higher standard deduction. You can double your standard deduction by filing jointly. The 2019 standard deduction for married filing jointly is $24,400. Its only $12,200 for married filing separately.
You can claim more tax credits. You may qualify for tax credits related to education, child and dependent care, and adoption expenses. You wont be eligible for these tax credits if youre married filing separately.
You only have to submit one tax return. This can save you time and money since you wont be filing two separate returns.
The primary drawback to filing jointly is that you both will be held responsible for errors or inaccuracies. Both spouses must report all income, deductions, and credits on the same tax return. Therefore, if you get audited by the IRS, youll both be on the hook for any penalties and interest that may be assessed.
Which Is Better For Your Financial Situation: Filing Taxes Jointly Or Separately
So youve tied the knot. Congrats! Getting married comes with a lot of firsts, which can be exciting and challenging. For one, this is likely the first time youve had the option to file taxes jointly but you can also choose to file as married filing separately.
Here are some considerations to help you decide how to file your taxes, plus tips if you decide to file your taxes jointly.
Should You File Your Taxes Jointly?
If youre dealing with any of the following situations, it may make sense to file separately until these wild cards are resolved and youve made all your financial decisions together as a couple for a full year:
When to File Jointly
It makes sense for most couples to file taxes jointly because the tax rate is usually lower and you can claim higher standard deductions. You are also eligible for several tax breaks that you cant claim when filing separately, including:
- Tuition and fees deduction
- Tax-free exclusion of U.S. bond interest
- Tax-free exclusion of Social Security benefits
- Child and dependent care credit
- Earned income credit
- American opportunity or lifetime learning education credits
Tips for Filing Taxes Jointly
If you decide to file taxes jointly, ask these questions before you get to your tax preparers office to make the process go smoother:
Get more help filing your taxes at the Regions Tax Center.
Content Type: Article
A Guide To Doing Your Taxes For The Very First Time
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Filing taxes can be intimidating no matter how many times youve done it, but it can be especially challenging if its your first time.
What documents do you need to collect? What information do you need to report? What deadlines do you have to meet? What if you make a mistake?
Its a lot to keep track of and theres a fair amount at stake as well. Accurately filing your taxes will not only help you avoid potential penalties, but it will ensure that you get the maximum refund possible.
This article will guide you through the entire process so that you know how to successfully file your taxes for the first time.
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How To File Your Taxes Jointly For The First Time
When you decided to say I do, you may not have considered the future tax implications of getting married. Marriage changes your taxes from the credits and tax deductions you can claim, to certain tax breaks that come with filing jointly.
However, not everyone chooses to file their taxes together. Depending on your personal circumstances, you may find that filing separately serves each of you better.
Heres a tax crash course for newlyweds who are filing together for the first time this coming tax season.
How Do I Claim The First
Claiming the First-Time Home Buyerâs Tax Credit is simple. If youâre using online software like Wealthsimple Tax or Turbotax, youâll answer yesâ to their questions about whether you purchased a home for the first time in this tax year. If youâre preparing your taxes yourself, youâll fill in the CRA home buyerâs amount on Line 31270 of your Schedule 1 with the amount $5,000. Thatâs it. The CRA will do the rest.
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What You Have To Do When You File Jointly
There are only a few musts when you start filing jointly as opposed to as an individual.
You need to file together once you hit common-law at the federal level, whichas we now knowis at 12 months of living together.
Youll need to, at a minimum, add your partners identifying details and their net income into your personal tax return. Thats how the CRA double-checks your numbers, and calculates your familys income as a whole, which can impact what credits and deductions you and your partner can claim.
Lastly, youll also need to pay attention to some specific rules around those credits and deductions. For some things, like claiming your child care expenses, it has to be claimed by the lower-earning partner except in specific situations, like if the lower-earning partner is in school. Luckily, the CRA will probably catch it and claw back some of your return eventually if you do it wrong, but thats a scary letter to get in the mailso make sure to do some research on what you need to know based on what youre planning to claim, and who should claim it.
And in terms of your actual obligations, thats really it when it comes to filing jointly in Canada. Not too bad, right? A few extra fields on your personal tax return and a bit of research? It could be way more complicated.
Should I Or Can I Claim My Wife Who Lives Overseas
Filing your taxes separately or together with your spouse is a choice you are free to make yourself. There is no wrong answer to can I claim my wife who lives overseas, and its just a matter of weighing which path will benefit you the most. And the best thing about it is, should your financial situation change in the next few years, you will be able to easily change your filing status from joint to single, or the other way around.
Your marriage vows, however, are slightly more binding.
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Getting Married: What Newlyweds Need To Know
Getting married? Have you thought about how it will impact your taxes? You may need to select a tax filing status, adjust your withholding and sell your home.
Taxes might be the last thing on your mind on your wedding day, but tying the knot can have a big impact on your tax situation. Here are some of the most important things you should know.
How To File Taxes When Married To A Foreign Spouse
Is there anything more romantic than taxes? Well, probably. But that doesnt mean you and your spouse should avoid the issue altogether, especially if one of you is a non-US citizen.
The fact is that the rules for filing joint taxes as a married couple in the US dont differ greatly if your spouse is foreign, and there are still many choices open to you as to whether to file joint or separate tax returns. Advantages run both ways, so be sure to consider all your options, as its difficult to learn how to file taxes when married to a foreign spouse.
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Qualifying Widow Status When One Spouse Is Deceased
The tax code allows you to file a joint return with your spouse for the tax year in which they die, then you might be able to file as a qualifying widow for two more years going forward, or perhaps as head of household. Otherwise, you’d then have to file as a single taxpayer.
A qualifying widow cant remarry during the two years during which this filing status is available, and they must have a child or stepchild who they can claim as a dependent and who lived with them through the entire tax year. Foster children don’t count.
Transmitting Your Tax Return Online
Your EFILE service provider can complete and file your return for you. For more information, go to EFILE.
You might be able to file your return online if you prepare your return with a tax preparation software or Web application. For more information, or to file your return, go to NETFILE.
You will not be able to file online without a SIN.
If you have requested a SIN, but have not yet received one, and the deadline for filing your tax return is near, file your tax return without a SIN to avoid any possible late-filing penalty and any interest charges. Attach a note to your return to let the CRA know why you did not enter your SIN.
If you are mailing your tax return, send it to Where to mail your documents. Do not mail your tax return to any other address.
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Will I Have To Pay A Marriage Penalty Now That Im Married
Theres no line item for a marriage penalty on your tax return. That doesnt make the penalty any less real. The marriage penalty is simply a way of saying that you may sometimes pay more tax as a married couple than the two of you would have paid as single people.
For example, some tax breaks and other provisions phase out at higher income levels. When the levels for married couples are less than double the levels for single people, there is, in effect, a penalty for being married.
Filing separately does not help avoid the marriage penalty.
In fact, it can make it worse. Many tax breaks are reduced or eliminated if you file as Married Filing Separately.
On the other hand, if one of you makes significantly more money than the other, your tax on a joint return may be less than the total you were paying as single people.
How To Decide Whether You Need To File A Return
Not everyone needs to file a federal income tax return, though if you worked for any significant part of the year, it is likely that you do.
You generally need to file a tax return if you earned more than the standard deduction amount, which for 2018 is $12,000 for single filers, $24,000 for married couples filing jointly and $18,000 for anyone filing as head of household. If youre claimed as a dependent on someone elses tax return, such as your parents, you generally need to file a return if you made more than $1,050 during the year.
But even if you dont meet those thresholds, there are still situations in which it may make sense to file a return.
If you paid federal and state withholding taxes, you would need to file a return in order to potentially get a refund, said Chris Panek, a CPA in Avon, Minn.
You also need to file a return to qualify for certain tax credits, such as the Earned Income Tax Credit , which can put a significant amount of money back in your pocket if youre working but earning a low income.
At the end of the day, its often worth filing unless youre absolutely certain that you dont need to file and that you wont qualify for a refund or any tax credits.
Theres no risk to filing a return, said Panek. You need to file a return in order to potentially get a refund, and if you do file a return and didnt need to, there shouldnt be any risk at all.
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Check Your Tax Withholding
“The first item on your to-do list should be adjusting your tax withholding with your employer,” Greene-Lewis explains. “When you are newly married, your income-tax liability will change depending on your spouse’s income. It can be higher or lower, and adjusting your withholding will ensure you don’t overpay or underpay your taxes.”
Know Your Filing Status
The IRS offers five filing statuses, and choosing the correct one is important, because it determines your standard deduction and affects other rules.
- You’re married, and you and your spouse file a single, joint return together.
- You’re married, but you and your spouse elect to file separate tax returns.
- Qualifying widow: You were married, but your spouse died during the last two years. You must have a dependent child to qualify for this status, and you can only use it for two years after the year in which your spouse died.
- Head of household: You’re “considered unmarried.” You might still be legally married to your spouse, but you didn’t live together at any time during the last six months of the year. You must additionally have a qualifying dependent who lives with you, and you must pay for more than half the cost of maintaining your home during the tax year. Other rules apply as well.
- Single: You’ve never married, or you’re legally divorced or separated by court order.
The rules for the head of household and qualifying widow filing statuses can be particularly complex, so you might want to check with a tax professional to make sure you qualify before you claim either of them.
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The Power Of Deductions
The need to account for deductible expenses is one requirement for which being a pack rat pays off. It can be a problem for those who throw away receipts and find it cumbersome to jot down things like mileage and expense transactions.
Being able to deduct expenses for your business or household can be one of the bright sides of filing taxes. Those deductions can lower your taxes and perhaps lead to a refund.
But you must prove what you spent, says Karen M. Reed, director of communications for Citrus Heights, California-based TaxResources Inc.
The time to get the documentation in order is when you are preparing your tax returnnot one to three years later when you are audited and cant remember what you did a long time ago, she said. Many taxpayers cheat themselves out of deductions by not keeping good records.
If deductions are later questioned by the IRS, Reed says, deductions for which you have no supporting documentation will be disallowed.
Most deductions require an invoice and proof of payment, such as a canceled check or credit card statement.
Reed says a set of conditions must be met before any deduction is approved by the IRS. She encourages taxpayers to take the time to understand the difference between what is considered personal versus business.
The taxpayer also needs to know that not every deduction affects the amount of income tax dueor the amount of a refund.
What Else Do I Need To Know
The IRS reminds you: file only one federal income tax return for the year no matter how many jobs you had, how many W-2 forms you’ve received, or how many states you lived in during the year.
Also, file only one return per calendar year even if you haven’t gotten your refund or haven’t heard from the IRS since you filed.
Just because your parents aren’t doing your taxes doesn’t mean they are out of the picture. You need to talk to them to find out if they are claiming you as a dependent.
“You don’t want to claim yourself as a dependent without talking to your parents first,” says Kohler, “because it could trigger a domino effect resulting in an audit because you’ve been claimed twice.”
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State Income Tax Returns
Just like the federal government, 43 states collect income tax . That means most people need to pay federal and state income taxes. Some cities or metro areas also collect income tax, like St. Louis, Missouri, and the Portland, Oregon, metro area.
Most states have marginal tax brackets, but each state chooses its own rates, so they vary greatly. For example, Virginia has four income tax brackets ranging from 2% up to 5.75%. California has nine brackets ranging from 1% up to 12.3%, with an extra 1% tax on income over $1 million. Nine states also have a flat tax, with everyone paying the same rate on all their income.
States also have their own tax codes, with some mirroring the federal system more closely than others in Ohio, the main income tax form is the IT 1040, but New Mexicoâs primary income tax form is called PIT-1. Tax seasons for state income tax may also differ from the federal tax season.
If you e-file using an online tax-filing service, you can typically file a state return as well. This may cost extra, though . Some states also have their own e-filing systems. Check with your individual city or state department of revenue to learn more about local income taxes. Just keep in mind that some states donât finalize all their tax rates until right before tax season starts.
Who Can File Jointly
If you just got married, congrats! But you may not be able to file jointly just yet.
You need to have been married before January 1 of this year to file last years taxes jointly. So if you got married on December 31 of last year or earlier, you can file together. But if you got married on or after January 1 of this year, you must file separately this tax season.
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