If you are married or just got engaged, congratulations! Marriage is a wonderful thing and a plus when it comes to filing taxes. Marriage was once referred to as a penalty because the standard deduction was less than double of a single taxpayer. Over the years that has changed and what was once a penalty is now viewed as a bonus. If you are engaged and plan to be married by December 31, 2017, you can adjust your withholdings to reap the benefits of next tax season early.
When you file your taxes as a married couple, you have the option to file as “married filing joint” or “married filing separate”. Choosing the “married filing joint” option provides the most benefits. The standard deduction for couples that choose this status is $12,600. The standard deduction for couples that choose the “married filing separate” status is $6,300.
Occasionally, there may be situations that are best suited for you and your spouse to file separately (i.e. tax penalty). Tax penalties happen when the combined income requires the couple to pay more taxes than they would if filing separately. One example of this is when filing jointly pushes you into a higher income bracket and causes you to owe. Besides tax penalties, there are other circumstances that may be more beneficial if you file separately. Examples of such would be if your spouse has unreported income, if one spouse has a huge medical expense or if your spouse owes unpaid student loans. In these instances, you may benefit from filing separately.
If you have yet to file your taxes, consider the above and determine which filing status works best for you and your spouse. No matter what you choose, TaxSlayer makes the process simple and easy.