As tax season is steadily getting closer, it is crucial to stay on top of your finances. The Internal Revenue Service doesn’t make married couples file jointly. Spouses can file separately.
There are advantages and disadvantages to both. Here is some information to determine which option is best for you. It’s difficult enough to do your taxes when you’re single. However, once you get hitched, your taxes get problematic. Married couples face a distinct set of tax breaks and challenges.
Married couples have the flexibility to reduce their tax liabilities and increase their financial benefits. From improving filing status to leveraging credits and deductions and credits, you have several choices at your disposal.
Taxes for Married Couples: An Overview
If you’re thinking about filing jointly, it’s vital to consider the tax implications. Filing a joint tax return provides access to several tax benefits. This includes benefits like:
- Eligibility for helpful tax deductions and credits
- Greater standard deduction
- Lower taxable income
- The capability to offset and share specific losses
You should thoroughly assess your financial situation and consult with a professional who specializes in tax preparation in Denver to completely understand the implications and make informed decisions that enhance your tax outcome.
Additionally, your income is taxed based on the tax tables for couples filing a joint tax return. This is beneficial if you and your spouse have considerably different incomes. Moreover, the Earned Income Tax Credit and other education credits are only available if you file jointly.
To file jointly, you and your spouse must be considered legally married by December 31, the last day of the tax year.
You’ll be entitled to a bigger standard deduction if you and your spouse file a joint tax return. Not to mention, the tax brackets are more substantial. Married couples who file separately are disqualified from claiming certain tax breaks. They’re only responsible for the correctness of the information on their returns and for paying any tax owed on their separate returns.
Ways to Boost Credits and Deductions
Standard vs. Itemized Deduction – Assess the total amount of your itemized deductions like charitable contributions, state and local taxes, and mortgage interest, with the standard deduction. Pick the higher option to reduce your taxable income.
Evaluating Tax Credit Eligibility – Check eligibility conditions for tax credits such as the Earned Income Tax Credit, the Child Tax Credit, and other education-related credits. These credits could deliver substantial tax savings. Certify you satisfy the requirements and collect the required documentation to claim it correctly.
The Bottom Line
If you’re uncertain which is best for your situation, tax professionals suggest preparing your taxes jointly and separately to decide which one makes the most financial sense. Marital situations must be taken into consideration, like if you’re unsure the marriage is going to last. Talk with one of our Denver tax experts to determine what’s right for you.