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Key Takeaways
- Double the Deductions: Married and filing jointly typically can net you a bigger Standard Deduction, reducing your taxable income—$27,700 for most couples under age 65 in 2023, jumping up to 29,200 in 2024.
- More Room for Tax Breaks: Filing together usually means you can earn more and still qualify for certain tax breaks, like IRA contributions and education credits.
- Watch Out for Higher Rates: If you file separately, you might pay higher taxes than if you teamed up on a joint return. This is especially true if only one spouse has taxable income.
- Saving on Medical Bills: Got big medical expenses? Filing separately might help you clear the 7.5% threshold on adjusted gross income. This can let you qualify for medical deductions, if you only claim one income.
Choosing between married filing jointly vs separately affects more than just how you fill out your taxes—it affects how much you pay or get back. While joint filing often leads to more benefits and a lower tax bill, each couple's situation is unique. Weigh the pros and cons to see whether filing together or on your own could put you ahead financially.
What are the benefits of Married Filing Jointly?
There are many advantages to filing a joint tax return with your spouse. Joint filers receive one of the largest standard deductions each year. This lets couples deduct a significant amount when they calculate their taxable income.
Couples who file together can often more easily qualify for various tax credits, like:
- Earned Income Tax Credit
- American Opportunity and Lifetime Learning Education Tax Credits
- Exclusion or credit for adoption expenses
- Child and Dependent Care Credit
Joint filers usually have higher income thresholds for certain taxes and deductions—this means they can earn a higher income and still qualify for certain tax breaks.
What about Married Filing Separately?
On the other hand, couples who file separately typically get fewer tax benefits. Separate tax returns may result in more tax.
In 2023, Married Filing Separately taxpayers get a Standard Deduction of $13,850. Compare this to the $27,700 that those who filed jointly can get. For 2024, these Standard Deductions increase to $14,600 and $29,200 respectively.
While when you add up the two separately filing Standard Deductions it equals the joint filing amount, there can be a significant difference when one spouse makes all or most of the family income. When filing jointly, the spouse with the higher income get’s to use the other spouse’s Standard Deduction as well as using the more favorable jointly filing tax brackets as compared to filing separately.
There are other downsides to filing separate returns:
- If you file a separate return from your spouse, you are often automatically disqualified from several of the tax deductions and credits mentioned earlier.
- Separate filers usually get a smaller IRA contribution deduction.
- Couples who file separate returns can't take the student loan interest deduction.
- The capital loss deduction limit is $1,500 each when filing separately, vs $3,000 on a joint return.
When should married couples file taxes separately?
Despite the numerous advantages of filing jointly, there are certain circ*mstances where filing separately could better serve your financial needs.
When It Makes Sense
- Medical expenses: If you or your spouse had a large amount of out-of-pocket medical bills, filing separately might help you surpass the IRS’s threshold to deduct these costs. That’s because the threshold is based on a percentage of your Adjusted Gross Income (AGI), which would be lower if only considering one income.
- Student loan payments: If your student loan repayment plan is determined by the income on your tax return, filing separately may help you keep your payments more manageable.
- Separated finances: In situations where couples prefer or need to keep their financial matters distinct—such as when preparing for a divorce — filing separately can provide that financial division. Filing separately can also limit your liability for your spouse’s tax matters.
Let’s look at an example of how filing separately could be a better choice. Say you have $10,000 in medical expenses and earned $50,000 from your job. That would meet the 7.5% threshold ($10,000 ÷ $50,000 = 20% of your income).
But if you filed together with your spouse, your adjusted gross income jumps to $135,000. This would disqualify you from claiming these medical expenses ($10,000 ÷ $135,000 = 7.4% of your income).
For more tips on when you might want to file separately, check out When Married Filing Separately Will Save You Taxes.
Rules for tax deductions when you file separate returns
When married couples opt to file their taxes separately, they must navigate a specific set of rules around tax deductions. The IRS requires uniformity for both spouses, meaning if one itemizes deductions, then both must do so. This can significantly influence the amount of deductions each spouse can claim.
Here are the specifics when it comes to deductions for Married Filing Separately:
- Both or none: If one spouse decides to itemize, the other cannot claim the Standard Deduction. For 2023, each spouse filing separately would have a Standard Deduction of $13,850 if they don't itemize.
- Shared deduction restrictions: When each spouse has paid toward the same deductible expense, like property taxes or mortgage interest, they must agree on how to split the deduction amount between their separate returns. The combined total deduction claimed should not exceed what would be allowable on a joint return.
- Capital loss deductions: The limit on the capital loss deduction for separate filers is $1,500 per person, in contrast to the $3,000 limit that joint filers share.
It’s important to weigh the possible benefits of itemizing against the benefits of claiming the Standard Deduction based on your unique tax situation. While itemizing could yield higher deductions, the limitations for separate filers might take away this advantage.
Who can file jointly or separately?
Filing taxes together or separately is a choice that comes with specific eligibility requirements, and understanding these rules is key for married couples during tax season.
- Marriage by year's end: To opt for 'Married Filing Jointly' or 'Married Filing Separately' for a tax year, the IRS considers your marital status as of December 31. If you were legally married on that date, you can choose either of these filing statuses for the entire year.
- Living apart but not legally separated: You're still eligible for the married filing statuses unless you are legally separated under a divorce or separate maintenance decree by the end of the year.
- Spouse passed away: If your spouse passed away during the tax year and you have not remarried, you may still file a joint return for that year.
- Common-law marriages: Couples in a legally-recognized common-law marriage in the state where it began can choose a married filing status.
Implications of filing status
Choosing the right filing status can affect your tax rates, your eligibility for certain tax benefits, and the amount of your Standard Deduction. Married couples should consider each option and choose the filing status that works best for their current living situation and financial goals.
When you file separately, can you file as Single if you're married?
When you're married and decide to file your taxes separately, you might wonder if it's possible to simply file as 'Single.' The answer is “no.” A tax filing status follows strict IRS rules, and when you're married, the option to file as Single is no longer on the table.
Legally separated or divorced individuals
If your marital status changes due to a legal separation or divorce, your tax filing options change too. Once your divorce is finalized, or you are considered legally separated by the end of the tax year, you may then file as Single or Head of Household if you meet the requirements.
Why you can't file as Single when married
The IRS's Single filing status is reserved for those who are not married or are legally separated according to state law. By ensuring accuracy on your tax returns, the IRS can correctly assess tax liability and eligibility for various credits and deductions.
Is it better to file jointly or separately?
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 TurboTax to prepare your return, we'll do the calculation for you and recommend the filing status that gives you the biggest tax savings.
You can also use our Tax Calculator to see estimates for your tax liability as filing separately or jointly to determine which is the better option for you and your spouse.
Can you change a past filing status from Married Filing Separately to Married Filing Jointly?
Yes. If you filed separately but want to change your filing status to Married Filing Jointly, you can do that. You can amend a past return within three years from the due date of the original return.
You may want to change a past filing status from Married Filing Separately to Married Filing Jointly if you realize that it may result in a tax refund.
Learn more about how to change your filing status.
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