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To find out which status would benefit you the most, you can run a side-by-side comparison. If youu2019re still unsure of which status makes the most sense for you, you should consider getting advice from a qualified CPA.<br>For more details visit: https://jarrarcpa.com/married-filing-jointly-vs-married-filing-separately/
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Introduction Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together. In the vast majority of cases, it’s best for married couples to file jointly, but there may be a few instances when it’s better to submit separate returns. Let’s see what you need to know about married filing jointly vs separately.
Benefits Of Changing Your Status Filing jointly typically provides married couples with the most tax breaks. Tax brackets for 2020 show that married couples filing jointly are only taxed 10% on their first $19,750 of taxable income, compared to those who file separately who only receive this 10% rate on taxable income up to $9,875. also, the IRS offers spouses who file jointly one of the biggest standard deductions each year.
Advantages of filing jointly There are many advantages to filing a joint tax return with your spouse. The IRS gives joint filers one of the largest standard deductions each year, allowing them to deduct a significant amount of their income immediately. Joint filers mostly receive higher income thresholds for certain taxes and deductions- this means they can earn a larger amount of income and potentially qualify for certain tax breaks.
Advantage Of Filing Separately? When deciding on married filing jointly vs separately, there are very specific situations when it pays to submit separate returns. For instance, you or your spouse have high or unpaid student loan debt. If you have defaulted on your student loans, meaning you haven’t paid on them in 270 days or more, you must consider filing separately. That’s because, in this, your joint tax refund could end up being rerouted through the Treasury Offset Program and put forward the unpaid debt, meaning neither of you would get a refund.
Deciding which status to use The best way to find out if you should file jointly or separately with your spouse is to prepare the tax return both ways. Double check your calculations and then look at the net refund or balance due from each method. If you use the best service provider to prepare your return, you can have the experts do the calculation for you, and recommend the filing status that gives you the biggest tax savings.
