If You Filed Jointly How Can You Know How Much You Made
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This article was fact-checked past our editors and CPA Janet Tater, senior product specialist with Credit Karma Tax®. It has been updated for the 2020 tax year.
For many wedded couples, the married filing jointly status is love at first sight at tax time.
Filing a joint return with your spouse may get y'all the highest standard deduction and a lower tax neb, plus you lot might authorize for benefits not available to married couples filing separate tax returns. If you lot utilise the married filing jointly condition, though, both of you are responsible for the tax and any interest or penalties owed, fifty-fifty if i of you lot didn't earn any money for the year.
And for all joint filers, in one case both spouses sign and file the return, they tin't amend that tax render and file separately later for that year after the due date. Here'due south what yous demand to know about the married filing jointly condition.
- How does the married filing jointly condition work?
- Who is eligible to use the married filing jointly condition?
- Who tin can't utilise the married filing jointly status?
- What are the taxation rates and standard deduction for married filing jointly in 2020?
- What are some pros and cons of married filing jointly?
- When should I choose married filing separately instead?
How does the married filing jointly condition work?
The IRS recognizes five filing statuses on the Form 1040: single, married filing jointly, married filing separately, caput of household and qualifying widow(er).
If yous're married, you lot and your spouse have the option of filing one federal income tax render.
Joint filers study their income, deductions and credits on the same federal render — even if but ane spouse had income in the revenue enhancement year. Both spouses will likewise list dependents on that joint render, both Social Security numbers will appear on the return, and both must sign it to apply the joint status.
Married taxpayers may also choose to file separate returns. The tax rules for the married filing separately status are different from married filing jointly rules. More than on that subsequently.
FAST FACTS
How does married filing jointly work for same-sexual activity couples?
Legally married same-sex couples can file their federal tax returns jointly and admission the aforementioned federal income tax breaks and benefits as heterosexual couples. Learn about tax tips for same-sex couples.
Who is eligible to employ the married filing jointly condition?
You can use the married filing jointly status for a revenue enhancement year if you've met any of these conditions.
- You were married every bit of December 31 of the tax year, even if you lot didn't live with your spouse during that time.
- Your spouse died during the revenue enhancement yr and you didn't remarry that twelvemonth.
- You were married at the end of the tax yr and your spouse died in the following calendar year, earlier filing a return for the tax year.
Who can't use the married filing jointly status?
Not every married couple will be able to employ the married filing jointly status. Hither are some situations where you and your spouse may not be eligible for the status.
- You were married for part of a taxation year simply officially divorced before the last twenty-four hours of the tax year. In that situation, the IRS considers you unmarried for the entire yr for tax purposes, and y'all tin't use the married filing jointly status.
- You lot or your spouse is a nonresident alien at any time during the year. But if one spouse is a nonresident or dual-status alien and the other is a U.Southward. denizen or resident alien at the end of the tax year, the nonresident/dual-status spouse can choose to be treated as a resident conflicting for revenue enhancement purposes, which would allow them to file a joint return. Learn about determining alien tax status.
If your spouse died during 1 of the previous two years, you haven't remarried, accept a qualifying child and meet other requirements, you'd take to employ the qualifying widow(er) status. While it'due south non exactly the aforementioned every bit married filing jointly, this status for surviving spouses provides some tax benefits like to the filing jointly status.
What are the revenue enhancement rates and standard deduction for married filing jointly in 2020?
Married couples who file jointly generally have the highest standard deduction (a gear up dollar amount that helps reduce the amount of income yous pay taxation on) and the most-generous taxation brackets.
For the 2020 tax year, the standard deduction is $24,800 for joint filers. And information technology could be higher if y'all're 65 or older or are blind. By comparison, unmarried filers get a standard deduction of $12,400 for 2020.
Here are the tax rates, tax brackets and additional revenue enhancement for articulation filers for 2020 federal income taxes.
Image: txupdatemfj-2020 The U.S. revenue enhancement lawmaking is progressive, which means your income could fall into multiple tax brackets. In that example, you'll pay the charge per unit for each bracket but on the portion of your income that falls within the thresholds of that bracket. And y'all'll pay a apartment amount of revenue enhancement in addition to the percent of income for most brackets.
For example, a married couple filing a joint render for 2020 who has taxable income of $70,000 would pay x% on the get-go $19,750 of taxable income ($1,975) and 12% on the remaining $50,250 ($6,030).
Their revenue enhancement calculation would look like this.
First tax rate that applies to their income: $19,750 x .ten = $1,975
Second taxation rate that applies to their income: $50,250 x .12 = $half dozen,030
$1,975 + $6,030 = $8,005
Plus, they would also pay an additional flat corporeality of tax from their get-go tax bracket to determine their total tax.
What are some pros and cons of married filing jointly?
There'south a lot to love about the married filing jointly tax status, only it'southward also not all hearts and roses for every couple.
Advantages of married filing jointly
For married couples, filing jointly every bit opposed to separately often means getting a bigger revenue enhancement refund or having a lower taxation liability. Your standard deduction is higher, and you may also qualify for other tax benefits that don't apply to the other filing statuses. Tax deductions and tax credits may also be worth more for joint filers.
For instance, joint filers who have children that qualify them for the kid tax credit tin can have modified adjusted gross income of up to $400,000 before their credit corporeality is afflicted. For all other filing statuses, that amount is $200,000.
And taxpayers who are field of study to the alternative minimum tax can fare ameliorate if they file jointly. For 2020, the AMT exemption amount for joint filers is $113,400, and their exemption begins to stage out at $1,036,800. For single filers, the exemption amount is merely $72,900 and information technology begins to phase out at a much lower income — $518,400.
Drawbacks to married filing jointly
"Most people believe that everything for the married filing jointly status must be twice what it is for single because it'due south two people," says Kristin Ingram, a certified public auditor at Accounting In Focus and an accounting lecturer at Academy of Hartford. "And that's not necessarily the case."
For example, the income threshold for the highest tax bracket in 2019 was more than $612,350 for people married filing jointly. A married couple who filed jointly and had a combined income of $650,000 per year would have a marginal tax charge per unit of 37%. Merely an unmarried couple with no kids where 1 partner earned $400,000 and the other earned $250,000 would each file separately as single. Each would have a marginal tax charge per unit of 35%.
This is informally known as the "spousal relationship penalty," under which spouses sometimes end up in higher taxation brackets faster than single people exercise.
Another drawback for articulation filers is what the IRS calls "articulation 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'south true even if you lot reported no income (while your spouse did), or if you lot both filed a joint return and and then got divorced later on. But in sure cases, 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.
When should I cull married filing separately instead?
Marriage merges two lives and, often, two sets of finances. Merging your taxes with your spouse's by using the married filing jointly condition certainly has advantages — only the filing status may non be for everyone.
Married couples tin still choose to file two separate returns, rather than a unmarried one, and there may be situations when that makes sense for some couples.
For example, if one spouse is on an income-based repayment plan for a federal student loan — which generally is based on an individual's income and not their spouse's — filing separately may be advantageous. Merely doing so will hateful y'all tin't have the student loan involvement deduction or education credits.
If a couple wants to go along their finances separate for whatsoever reason, or they aren't willing to take responsibility for the other'south tax obligations, they may choose to file separately. And if one spouse's refund could exist offset for a tax debt, kid support or other government debt, filing separately may allow the unencumbered spouse to keep their own refund — although innocent spouse relief may be an pick if they however want to file jointly. And if there'southward a big divergence betwixt 2 spouse'south incomes, the lower-earning spouse may benefit from filing separately.
Learn more than about the married filing separately status.
Bottom line
In many cases, it'south advantageous for married couples to file jointly. Just for some wedded duos, it could make sense to file separate returns. You may desire to calculate your taxation refund or tax liability for both scenarios carefully before choosing one.
Remember, when you both sign and file a joint return, it'southward forever, because of 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 assist you determine which status is best for your situation. You may also use the Credit Karma Revenue enhancement® online tax-filing and preparation service to help you determine on a tax status, and then file your federal and single-state tax returns for free
Relevant sources:
IRS Grade 1040, U.S. Individual Income Tax Render | IRS Publication 17, Your Federal Income Tax (for Individuals) | IRS Publication 501, Dependents, Standard Deduction and Filing Data | IRS SOI Tax Stats — Individual Statistical Tables by Filing Status | IRS Answers to Oft Asked Questions for Individuals of the Same Sex Who Are Married Nether State Police force | IRS: Determining Alien Status | IRS: Nonresident Conflicting Spouse | IRS: Choosing the Correct Filing Status | IRS Topic No. 501: Should I Itemize? | IRS Topic No. 205 Innocent Spouse Relief (Including Separation of Liability and Equitable Relief) | IRS Revenue Procedure 2019-44 | IRS Provides Tax Aggrandizement Adjustments for Tax Year 2020
A senior product specialist with Credit Karma Revenue enhancement®, Janet Murphy is a CPA with more a decade in the tax industry. She's worked as a taxation analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. Y'all tin find her on LinkedIn.
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Source: https://www.creditkarma.com/tax/i/married-filing-jointly-filing-status-guide
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