How Does Getting Married Affect My Tax Filing Status?

Marriage is a joyous occasion that brings together two lives, but, as you probably already know, it also brings some changes to your financial picture. This includes how you file your taxes.

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But don't worry, this doesn't have to be stressful. Explore how marriage affects your tax filing status as well as the potential benefits it can bring.

In What Ways Does Marriage Affect Taxes?

Getting married introduces new tax filing options that can be advantageous. Here are some key ways marriage affects taxes:

• Filing statuses: As a single person, you can only file as Single or Head of Household (if you have qualifying dependents). Marriage unlocks two new filing statuses: Married Filing Jointly and Married Filing Separately. These offer different tax benefits depending on your income and situation.
• Tax brackets: When you file jointly, the IRS uses your combined income to determine your tax bracket. This can be beneficial if one spouse earns significantly less than the other. You'll pay a lower tax rate on a portion of your income, potentially saving you a substantial amount.
• Tax deductions and credits: Many tax deductions and credits are available to both single and married filers. However, some, such as the Earned Income Tax Credit (EITC) and the Child Tax Credit, have eligibility requirements that can be affected by your filing status and combined income as a married couple.
• Standard deduction: The standard deduction is a set dollar amount you can subtract from your taxable income, reducing your tax bill. When you file jointly, you get a higher standard deduction than when filing single. This can be a significant benefit for many couples.

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Do You Have to File Jointly If You Are Married?

No, you’re not obligated to file jointly after marriage. You have the option to file separately. Here's a breakdown of both options:

• Married Filing Jointly (MFJ): This is generally the most advantageous option for married couples. You combine your income and deductions, potentially benefiting from a lower tax rate and maximizing certain tax credits.
• Married Filing Separately (MFS): This option is typically less beneficial than filing jointly. Each spouse files their own tax return with their own income and deductions. MFS might be considered in specific situations, such as if one spouse has significant debt or is self-employed with potential business losses.

A word of warning: There can be a "marriage penalty" in certain situations with MFS. This penalty can arise due to the loss of certain tax benefits and deductions, such as EITC and the Child and Dependent Care Credit, which are unavailable to couples filing separately.

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Considering the Tax Benefits

Marriage can affect taxes in several beneficial ways, but the best option for you depends on your specific financial picture. Here are some key factors to consider:

• Income levels: If one spouse earns significantly more than the other, filing jointly can leverage the lower tax bracket of the lower earner, potentially saving you a lot.
• Deductions and credits: Consider any deductions or credits you qualify for individually. Filing jointly might sometimes limit your eligibility for certain credits, such as EITC.
• Debt and business considerations: If one spouse has significant debt or a business with potential losses, filing MFS might be an option to avoid impacting the other spouse's tax situation.

Navigating Your New Tax Landscape

Finally, let’s end with some helpful tips.

• Tax planning is key: It's always wise to do some tax planning before filing, especially when there's a change in your marital status. Consider consulting a tax professional to discuss your specific situation and determine the most advantageous filing status for you.
• Tax software can help: Many tax software programs offer guidance on filing jointly or separately. These tools can help you estimate your tax liability under both scenarios.
• The IRS website is a resource: The IRS website offers a wealth of information on filing statuses, deductions and tax credits. It even has a tool to help you find the best status for your situation.