If you're married, you have two options on how to file your income taxes: You can file a joint return, or you and your spouse can each file an individual return. Which is better? Read on.
A joint return is a single return for a husband and wife that combines their incomes, exemptions, credits, and deductions. The vast majority of married couples file jointly—over 95%.
You can choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return. You can file a joint return even if one of you had no income or deductions.
Only a married couple can file a joint return. You are considered married for tax purposes for the entire year if, by December 31:
If your spouse dies and you do not remarry in the same year, you may file a joint return for that year. This is the last year for which you may file a joint return with that spouse.
If you’re married, you always have the option to file your taxes separately. If one of you won’t agree to file a joint return, you’ll have to file separately, unless you qualify for head of household status. When you file a separate return, you report only your own income, exemptions, credits, and deductions on your individual return.
If you live in a community property state, the income you and your spouse earn is split evenly between you, as are your expenses (unless they are paid by one spouse with his or her separate non-community funds—for example, money you earned or inherited before marriage). There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
There are several disadvantages to filing separately that you need to be aware of, however, because these can easily outweigh any potential benefits:
As a result of the Tax Cuts and Jobs Act, the tax rates in effect during 2018 through 2025 for married taxpayers filing separate returns are exactly half those for marrieds who file joint returns. Nevertheless, most married people save on taxes by filing jointly, particularly where one spouse earns most or all of the income. This is because filing jointly shifts the high earner's income into a lower tax bracket. If spouses earn about the same income, there should be little or no difference in their tax rates whether they file jointly or separately. The only way to know for sure if you’ll pay more or less taxes by filing separately or jointly is to figure your taxes both ways. This isn’t hard to do if you use tax preparation software.
There is one potential huge drawback to filing jointly: As a general rule, when a married couple files a joint return each spouse is jointly and individually liable for the entire tax owed on the return. This means that either spouse can be required to pay the tax due, plus any interest, penalties, and fines.
A spouse can claim “innocent spouse relief” and avoid personally paying the other spouse’s taxes if he or she can show the IRS that: (1) the understatement of tax was due to the other spouse, and (2) the spouse did not know, or have reason to know, that there was an understatement of tax when he or she signed the joint return. However, both propositions can be hard to prove. You’ll avoid being personally responsible for your spouse’s taxes if you file a separate return. This is something you should seriously consider if you know your spouse cheats on his or her taxes.