If you’ve recently gotten married, congrats! As you already know by now, married life brings a lot of new changes. You may be transplanting cities, buying a house, or finally moving in together! Whatever exciting step you two are taking together, we applaud you. Getting married is a big deal. Now let’s talk about your joint return.
As you may already know at this point, marriage brings some less fun changes, too. Probably the most notorious of which relates to your finances. Perhaps you’re opening a shared bank account or credit card, navigating dependent coverage for your health insurance, or setting a new budget. The financial growing pains that come with getting married take many couples by surprise—or at least more than they need to.
One of the best examples? Taxes.
If it’s your first time filing taxes as a couple, you may be surprised at the changes that come when you start filing for two. Deductions grow, qualifications change, and you might jump up an income tax bracket! You’re in this together, but changes to your filing status at tax time can provide a serious reality check.
Unless you and your spouse fall into one of a couple pretty specific tax situations, you’ll just about always benefit from filing a joint return. To encourage married folks to file a joint return, the IRS offers perks like access to higher deduction thresholds and tax credits that the “married filing separately” folks can’t access.
Being married doesn’t mean you absolutely need to file a joint tax return! In some cases, filing separately is the best way to go.
Not everyone is fortunate to have a completely spotless record with the IRS. And even if you file and pay on time every year, it’s easy to make mistakes.
When you file jointly, any messiness with your spouse’s tax situation can carry over to your return, too. If you’re filing just one joint tax return, the IRS views it all as just one picture—so even if it’s the numbers on your spouse’s income stream that are off, you’ll both be audited.
If your spouse has recently been audited or you’re unsure whether some of the information on their return is incorrect, it may be in your best interest to file separately this year. Better to be safe than sorry!
If you’ve had to pay for medical care out of pocket at some point during the year, deducting the costs can offer you serious relief come tax time. Unfortunately, a jointly filed tax return can complicate things.
The IRS allows you to deduct any unreimbursed medical care expenses that exceed 10% of your adjusted gross income, or AGI. If you earn $60,000, you can only deduct expenses that exceed $6,000. (So, if your expenses come out to $7,500, you can deduct $1,500 in total.) Unfortunately, a two-income household filing a joint return will have more trouble qualifying for the deduction.
If you or your spouse has had medical bills stack up this year, you may want to crunch the numbers to determine whether or not it’s worth filing separately. The difference may amount to thousands of dollars!
Still unsure whether you and your partner should be filing jointly or separately this year? Try it both ways!
Yes, that’s added time and added hassle. But by preparing your taxes both separately and jointly, then seeing which refund is bigger, you’ll get a lot more than just some clarity about your filing status. You’ll also learn a lot about the exact differences between filing jointly and separately. You might just learn that your out-of-pocket medical expenses you can deduct are outweighed by a higher deduction!
For some reason, taxes seem to go undiscussed with most couples before they’ve officially tied the knot. But like all other financial topics, it’s important you cover the basics if you’re thinking about getting married. Nobody likes a nasty tax surprise. Trust us, nobody.
Indeed, if you’re planning to share your life together, share your financial goals with each other. Learn about each other’s tax backgrounds and financial situations, so you can enter marriage on the same page! And whether you need to file jointly or separately, you’ll know what to do from there.