Married couples are met with the question of whether they should files taxes joint or separately with the IRS.
Tax season is here, so the time for them to decide is now.
According to Marca, married couples are encouraged to file jointly. Despite this, there are some situations where filing separately may be a better idea.
For married couples filing jointly in 2022 the standard deduction was $25,900. Those filing separately saw a standard deduction of $12,950. Joint filers normally have a higher income threshold for tax breaks. One of these includes the deduction for contributing to an IRA.
Other tax credits married couples filing jointly could get include
- Earned Income Tax Credit
- American Opportunity and Lifetime Learning Education Tax Credits
- Exclusion credits
- Child and Dependent Care Tax Credit
So, how should married couples file taxes with the IRS?
Couples that have a larger amount of medical expenses they’ve paid for out of pocket may benefit from filing separately.
Those with a high AGI have a harder time to collect on those out of pocket expenses since they cannot exceed 7.5% of your AGI (which goes up if you combine incomes).
This means filing separately on just one income could be more beneficial.
To decide which is best for you, look at both ways of filing and compare the bottom lines to see which has a bigger refund, or lesser tax bill.
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