You’ve made it through the year and are now ready to file your taxes. Maybe you’re looking forward to joint tax filing, or maybe you’re dreading it.
Either way, let’s explore what married filing jointly means and how it impacts your taxes.
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What is Married Filing Taxes Jointly?
When a married couple files their taxes together, it is called “married filing jointly.” This is the most common way for married couples to file their taxes.
When you file your taxes jointly, you and your spouse each declare your own income and deductions on one tax return. You are both responsible for the accuracy of the entire return, as well as any tax owed.
One advantage of filing jointly is that it often results in a lower tax bill than if the couple had filed separately. This is because, in general, married couples have a lower combined tax rate than two single filers with the same income.
In addition, there are certain deductions and credits that can only be claimed when filing jointly. Couples who file together can usually qualify for multiple tax credits such as the:
- Earned Income Tax Credit
- Child Tax Credit
- American Opportunity and Lifetime Learning Education Tax Credits
- Exclusion or credit for adoption expenses
- Child Care Tax Credit
Watch this video to see if you should file jointly
What is the married filing jointly deduction?
If you’re married and file a joint tax return with your spouse, you may be able to take advantage of the married filing jointly deduction. This deduction can save you money on your taxes by allowing you to file one return instead of two.
To qualify for the deduction, you and your spouse must both be U.S. citizens or resident aliens, and you must have been married as of December 31st of the tax year. You also must have filed your return by the due date (including extensions).
If you’re eligible for the deduction, it can save you money on your taxes by reducing your taxable income. The standard deduction amount is $25,900.
What are the Married filing jointly tax brackets?
The tax brackets for married filing jointly are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The rate for married filing jointly is the same as the rate for single filers.
The Married Filing Jointly (MFJ) status is the most common filing status for married couples. When you file MFJ, both spouses combine their incomes, deductions, and credits on a single tax return.
This allows you to take advantage of certain tax breaks and receive a lower overall tax bill.
Three different types of income are taxed when filing jointly
When you file your taxes jointly, three types of income are taxed.
- All earned income is taxed the same, whether it’s from a job or investments.
- Unearned income includes things like capital gains from selling stocks or real estate, dividends and interest on investments, and passive business income such as rental properties.
- Tax-exempt income is not taxable to either person. This includes Social Security benefits and some tax-exempt pensions.
Some credits are adjusted for joint filers
When you file your taxes, you’re generally looking to see how much income tax you owe. But not all of your tax bill is calculated using the same system.
Some of it depends on which credits you qualify for and whether those credits are adjusted for joint filers or not. There are two types of credits: nonrefundable and refundable.
Nonrefundable means that if the credit brings your tax liability below zero, you don’t get any money back from the IRS.
In contrast, refundable means that if the credit brings down your tax liability below zero, then a check will be sent to cover the difference between what’s owed and what was paid through withholding or estimated taxes throughout the year.
Credits are subtracted from an individual’s total income tax bill before calculating whether they owe anything more or less than they’ve been paid by their employer in payroll taxes (Social Security and Medicare).
The goal here is to ensure single filers with similar incomes pay roughly equivalent amounts in federal income tax as couples filing jointly with similar incomes–but without penalizing single parents who have children under 18 living at home full time!
Married filing separately vs jointly
If you have a spouse or common-law partner, the filing requirements for your taxes become more complicated. Depending on the income and other factors, it might be beneficial for you to file jointly with your spouse or partner.
Your combined tax liability will be less than if you filed separately since some deductions can only be claimed when filing jointly.
However, there are also downsides to filing jointly: it makes sense only if both spouses/partners have earned income and both want to claim deductions such as child care expenses or student loan interest payments.
If one of them has little or no earnings but wants to claim these deductions anyway (as happens especially often in situations where one spouse/partner stays at home. then
It’s usually better for that person to file separately rather than with their partner/spouse because otherwise, they’ll get no benefit from these deductions whatsoever—they’ll still just get whatever standard deduction is allowed by law regardless of whether their combined earnings exceed those amounts.
If you file jointly, you’re responsible if your spouse owes back taxes or student loans
- Filing jointly means you’re responsible for any unpaid taxes, student loans, and other debts your spouse may have.
- If your spouse owes taxes or has unpaid student loans, those debts become part of the joint tax return.
- You are responsible for paying them even if they were incurred before you got married.
Filing Your Taxes Jointly
If you’re getting married, filing jointly is probably the easiest way to go. And if you’re already married, there’s no reason not to file your taxes with your spouse. But consider all of the factors before making a decision.
When two people get married, they have the option to file their taxes jointly or separately. Filing jointly usually results in a lower tax bill because the IRS treats married couples as one unit.
When you file your taxes jointly, you and your spouse combine your incomes and claim the same deductions. This is unlike filing separately, where you each file your own return and don’t share any information.