How Does Uncle Sam Factor In?
Getting married does more than combine incomes – it also presents a new filing status when tax time rolls around.
Married couples can continue to file individual returns as “married, filing separately” or they can choose to file one tax return jointly and receive several credit benefits in the process.
Joint filers can claim adoption expenses, dependent care costs and earned-income credits, something not allowed for married couples filing separately. In addition, combining your income on one return makes it easier to qualify for the child tax credits.
The drawback to filing jointly is the well-known marriage tax penalty, giving married couples a smaller deduction than they would receive as two single people. And although the 2003 tax cut created some relief from this penalty, the larger deductions are slowly being phased out.
Filing jointly also makes both filers liable for the full return. That means that if one spouse gets creative with their reporting, both are on the hook to the IRS.
Of course, if one spouse in unaware of the incorrect data, they are not responsible for the penalties incurred but this is much harder to prove when both parties have signed the return. The best solution in this case would be to file separately.
Taxes and Marriage FAQ’s:
Taxes and Marriage
How Does Uncle Sam Factor In?
Getting married does more than combine incomes – it also presents a new filing status when tax time rolls around.
Married couples can continue to file individual returns as “married, filing separately” or they can choose to file one tax return jointly and receive several credit benefits in the process.
Joint filers can claim adoption expenses, dependent care costs and earned-income credits, something not allowed for married couples filing separately. In addition, combining your income on one return makes it easier to qualify for the child tax credits.
The drawback to filing jointly is the well-known marriage tax penalty, giving married couples a smaller deduction than they would receive as two single people. And although the 2003 tax cut created some relief from this penalty, the larger deductions are slowly being phased out.
Filing jointly also makes both filers liable for the full return. That means that if one spouse gets creative with their reporting, both are on the hook to the IRS.
Of course, if one spouse in unaware of the incorrect data, they are not responsible for the penalties incurred but this is much harder to prove when both parties have signed the return. The best solution in this case would be to file separately.
Taxes and Marriage FAQ’s: