Should we file taxes jointly or separately? A guide for couples who said 'I do' in 2022

2023-01-06

Saying “I do” was the easy part. Now that you’re married, try figuring out if it makes sense to file your taxes together or separately.

It’s the age-old quandary couples face each year because of the benefits and drawbacks that come with each option. A simple coin toss to decide which route to take could end up being more costly or cause you to miss out on hefty tax credits and deductions, leading to a smaller tax refund.

For instance, the standard deduction for married couples filing jointly is $25,900 this year versus $12,950 for separate filers. For newlyweds who aren’t yet homeowners this matters a lot since it likely makes more sense for them not to file an itemized return and take the standard deduction, says Tim Speiss, a CPA and partner of EisnerAmper in New York.

But there are many more considerations to take into account before you make your final decision.

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What does filing jointly mean?

Unless you’re married, the only way you can file your taxes is on your own. But if you’re married you can choose whether you want to file a joint return or file two individual returns.

Filing a joint tax return means your income and your spouse’s income get combined together. The joint income is subject to different tax brackets than single filers.

The Internal Revenue Service raised the thresholds for taxes filed this year to adjust for inflation.

Marginal tax rates for married couples filing jointly:

35% for incomes over $431,900
32% for incomes over $340,100
24% for incomes over $178,150
22% for incomes over $83,550
12% for incomes over $20,550
10% for incomes less than $20,550

Marginal tax rates for individual filers:

35% for incomes over $215,950
32% for incomes over $170,050
24% for incomes over $89,075
22% for incomes over $41,775
12% for incomes over $10,275
10% for incomes less than $10,275

Importantly, filing jointly means you’re both on the hook for the money you and your spouse owe to the Internal Revenue Service prior to your marriage.

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What are the rules for married filing jointly?

In order to file a joint tax return in 2023, you have to have been legally married by Dec. 31, 2022. So as long as you got your marriage license in 2022, you’re considered married in the eyes of the IRS.

But if you got divorced or legally separated from your spouse at any point during 2022, you’re considered unmarried for the entirety of the year and cannot file a joint return.

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Finally, to file jointly you and your spouse must both agree to it. That’s why both signatures are required on the tax return.

Do you get more money if you file jointly?

“When you file jointly, that is typically how you get the largest legitimate refund,” says Scott Curley, co-CEO of FinishLine Tax Solutions, a tax consulting firm based in Houston, Texas.

That’s because there are more tax deductions and credits married couples filing jointly are eligible for. For example, the Earned Income Tax Credit (EITC) is generally only available to married couples who file jointly. The EITC enables low-income households to deduct as much as $6,935 off their taxes if they have three or more children.

Here are the 2022 income qualifications for the EITC.

Similarly, the Adoption Credit and Child and Dependent Care Tax Credit are only available for married couples filing jointly. These credits can directly lower your tax bill and trigger bigger refunds.

Additionally, couples filing jointly are subject to significantly higher income thresholds for each making the maximum $6,000 deductible IRA contribution.

When should a married couple not file jointly?

If you had a lot of out-of-pocket medical expenses last year it may make sense to file a separate return. That’s because the tax code allows you to deduct out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income. When you file jointly you have one adjusted gross income which that 7.5% rule applies to.

So if for instance, you had $15,000 of out-of-pocket medical expenses last year with an adjusted gross income of $70,000 you could deduct $9,480 ($70,000 x 7.5% = $5,250; $15,000 – $5,250 = $9,480). Whereas if you filed taxes jointly and your adjusted gross income was $200,000 you wouldn’t be able to deduct any of your medical expenses since it wouldn’t exceed 7.5% of it.

Another situation where it may not make sense to file a joint return is if one spouse has a significantly lower income, Speiss says. That’s because the lower-income spouse may be eligible for more itemized deductions by filing individually rather than alone.

Also if you don’t owe any money to the IRS but your spouse does, by filing together your tax refund could be applied toward the tab they’ve racked up with the IRS.

“The system does not distinguish between parties if they file jointly,” says Curley of FinishLine. But if you file separately you won’t be liable for your spouse’s tax burden.

Curley says “dozens” of his clients over the years ran into this issue because one spouse wasn’t transparent with the other about how much money they owe the IRS.

He recommends bringing this up with your partner before you tie the knot.

Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here

This article originally appeared on USA TODAY: Married filing separately vs jointly: A tax guide for newlyweds

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