Married filing jointly: Is it the status that leads to tax bliss?

Young same-sex couple sitting in their living room doing their taxes on a laptop, ready to use the married filing jointly status for the first time. Young same-sex couple sitting in their living room doing their taxes on a laptop, ready to use the married filing jointly status for the first time. Image:

In a Nutshell

The married filing jointly status typically gives married couples the highest standard deduction, the lowest tax bill and more tax breaks than if they file separately. The downside? Both spouses are liable for taxes owed on a joint return, even if one didn't earn any income. And in some cases, it might make sense to file separate returns.

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For many wedded couples, the married filing jointly status is love at first sight at tax time.

The IRS gives married couples the choice of filing tax returns either jointly or separately, which is an important decision to make. Your tax-filing status affects the taxes you pay, the standard deductions you can take and certain tax breaks you’re eligible to claim.

Filing a joint return with your spouse may get you the highest standard deduction and a lower tax bill, plus you might qualify for benefits not available to married couples filing separate tax returns. If you use the married filing jointly status, though, both of you are responsible for the tax and any interest or penalties owed, even if one of you didn’t earn any money for the year.

And for all joint filers, once both spouses sign and file the return, they can’t amend that tax return and file separately later for that year after the due date. Here’s what you need to know about the married filing jointly status.

Filing status basics

The IRS recognizes five filing statuses on the Form 1040: single, married filing jointly, married filing separately, head of household and qualifying widow(er). Out of the 150 million-plus federal returns filed in tax year 2016, more than 54 million people used either the married filing jointly or qualified widow statuses, which both offer the same tax rates, according to the IRS. The federal agency counts these tax returns together.

Joint filers, including legally married same-sex couples who choose to file jointly, report their income, deductions and credits on the same income tax return — even if only one spouse had income in the tax year. Both spouses will also list dependents on that joint return, and both must sign the return to use the joint status.

Check the eligibility rules for who qualifies as a dependent and whether you can claim tax breaks such as the earned income tax credit or the child tax credit.

In addition, there are some unique tax situations. For example, if your spouse is considered a “nonresident alien” — someone who’s not a U.S. citizen or resident — you can choose to treat your spouse as a resident alien for tax purposes. You both would need to report your worldwide income using one joint return.

Eligibility requirements for married filing jointly status

You can use the married filing jointly status for 2018 if you’ve met any of the following conditions:

  • You were married as of Dec. 31, 2018, even if you didn’t live with your spouse during that time.
  • Your spouse died in 2018 and you didn’t remarry that year.

If you’re eligible to file jointly, then you’ll want to check whether you need to file a return at all. For the 2018 tax year, married couples must file a federal income tax return if any of the following are true:

  • Both spouses are younger than 65 and their gross income is at least $24,000.
  • One spouse is 65 or older and the couple’s gross income is at least $25,300.
  • Both spouses are 65 or older and the couple’s gross income is at least $26,600.
  • Regardless of your age, if you didn’t live with your spouse at the end of 2018 (or on the date your spouse died), and your gross income was at least $5, you must file a return.

Some good news: If married filing jointly, you don’t have to count Social Security income in these equations unless the combination of your gross income, any tax-exempt interest and half of your Social Security benefits equals $32,000 or more.

Life events that influence your status

Your tax return status may change from one year to the next. Here are a few reasons you may or may not use the married filing jointly status.

  • If you’re married as of Dec. 31, 2018, then you can use the married filing jointly status.
  • If you’re married and you believe your spouse is hiding income or you don’t want to be responsible for your spouse’s tax liability, then you may want to choose the married filing separately status.
  • If you legally separate from or divorce your spouse as of Dec. 31, 2018, then you can start using the single or head of household status, whichever pertains to you.
  • If your spouse dies, you can still use the married filing jointly status for the tax year of your spouse’s death as long as you remained unmarried. After that, eligible surviving spouses may use the qualified widow status for two years.
How major life changes can affect your taxes

Tax rates and standard deduction for married filing jointly

For the 2018 tax year, you can’t claim a personal exemption for yourself or anyone else because the Tax Cuts and Jobs Act of 2017 temporarily suspended personal exemptions. However, you can lower your tax burden using either itemized deductions or the standard deduction, which is a dollar amount that automatically reduces your taxable income.

In 2018, the standard deduction is $24,000 for joint filers. It could be higher if you’re 65 or older or are blind.

Here are the tax rates and tax bracket thresholds for taxpayers who qualify to file as married filing jointly in 2018.

Tax rate Tax bracket thresholds
10% $0–$19,050
12% $19,051–$77,400
22% $77,401–$165,000
24% $165,001–$315,000
32% $315,001–$400,000
35% $400,001–$600,000
37% $600,001 and more

The U.S. tax code is progressive, which means your income could fall into multiple tax brackets. In that case, you’ll pay the rate for each bracket only on the portion of your income that falls within the thresholds of that bracket. And, you’ll pay a flat amount of tax in addition to the percentage of income for most brackets.

For example, a married couple filing a joint return in 2018 who has taxable income of $70,000 would pay 10% on the first $19,050 of taxable income ($1,905) and 12% on the remaining $50,950 ($6,114).

Their tax calculation would look like this.

$19,050 x .10 = $1,905

$50,950 x .12 = $6,114

$1,905 (from the first tax rate that applies to their income) + $6,114 (from the second tax rate that applies to their income) = $8,019

Plus, they would also pay an additional flat amount of tax from their first tax bracket to determine their total tax.

Pros and cons of married filing jointly

Advantages of married filing jointly

For married couples, filing jointly as opposed to separately often means getting a bigger tax refund or having a lower tax liability. You may also qualify for other tax benefits that do not apply to the other filing statuses, and your standard deduction is higher.

Drawbacks to married filing jointly

This filing status isn’t all tax bliss — and it doesn’t always get you double the tax break, as you might think.

“Most people believe that everything for the married filing jointly status must be twice what it is for single because it’s two people,” says Kristin Ingram, a certified public accountant at Accounting In Focus and an accounting lecturer at University of Hartford. “And that’s not necessarily the case.”

For example, the income threshold for the highest tax bracket is $600,001 for people married filing jointly. A married couple who files jointly and has a combined income of $650,000 per year would have a marginal tax rate of 37%. But an unmarried couple where one partner earns $400,000 and the other earns $250,000 would each file separately, and each would have marginal tax rates of 37% and 35% respectively, since one of their individual incomes would qualify for a lower tax bracket.

This is informally known as the “marriage penalty,” under which spouses sometimes end up in higher tax brackets faster than single people do.

Another drawback for joint filers is what the IRS calls “joint and several tax liability.” That means each spouse is responsible for taxes owed and penalties and interest that may arise from a joint tax return.

That’s true even if you reported no income (while your spouse did), or if you both filed a joint return and then got divorced later. In certain cases, however, you might be able to qualify for relief from the responsibility of tax owed on a joint return or even seek a refund of tax paid.

Bottom line

In many cases, it’s advantageous for married couples to file jointly. But for some wedded duos, it could make sense to file separate returns. You may want to calculate your tax refund or tax liability for both scenarios carefully before choosing one.

Remember, when you both sign and file a joint return, it’s forever, due to the joint liability aspect — you won’t be able to amend it later to file under the married filing separate status after the due date for your tax return.

The IRS offers a free tool that can help you determine which status is best for your situation. You may also use the Credit Karma Tax® online tax-filing and preparation service to help you decide on a tax status, and then file your federal and single-state tax returns for free.