Married taxpayers have the choice between filing a joint tax return or a separate tax return. The Married Filing Jointly filing status provides more tax benefits than married filing separate filing status, but taxpayers will need to weigh the pros and cons and decide for themselves which is the best filing status.
You and your spouse can file a joint tax return if you are legally married. You are considered legally married if you are married on the last day of the year in question. In order to file jointly, both you and your spouse must also agree to file a joint tax return, and both must sign the return.
The IRS advises that, "If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses" (from the "Married Filing Jointly" section of Publication 501).
How Married Filing Jointly Impacts the Tax Return
A person's filing status determines which standard deduction amount and which schedule of tax rates are used when calculating the federal income taxes. For the year 2014, a couple who files jointly can claim a standard deduction amount of $12,400 (or itemized deductions if higher than this amount). The 2014 tax rates for the married filing joint status are as follows:
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What's a Joint Tax Return?
By filing a joint tax return, both spouses report all their income, deductions, and credits on one tax return. Both spouses must sign the return, and both spouses accept full responsibility for the accuracy and completeness of the information reported on the tax return. If the tax is unpaid, each spouse is held personally responsible for the payment. If the tax return is audited by the IRS, each spouse will be held responsible for providing documents to demonstrate the accuracy of the tax return. In other words, each spouse is held jointly and severally liable for the taxes filed on a jointly filed tax return.
The IRS cautions, "Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. This means that if one spouse does not pay the tax due, the other may have to. Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse" (from Publication 501).
The IRS may grant relief from joint liability for taxes through innocent spouse relief, separation of liability, or equitable relief. Refer to Publication 971, Innocent Spouse Relief, for additional information about these tax relief programs.
Even if your spouse dies during the year, you are still able to file a joint return as if they were still alive. The IRS explains, "If your spouse died during the year, you are considered married for the whole year and can choose married filing jointly as your filing status" (from Publication 501).
Filing Joint versus Separate Returns
Filing a separate return provides relief from joint liability for taxes. This means that each spouse will be responsible for the accuracy of their separate tax return and for the payment of their separate tax liability. However, married taxpayers who file separately are not eligible for several tax deductions and credits, and may have higher tax rates. While it is usually advantageous to file a joint return, there are situations when filing separately is preferred. Some situations in which filing separately is preferred include:
- The tax on the separate tax returns, when combined, is the same or very close to the tax on a joint return. In this case, filing separately achieves the goal of maintaining separate responsibility for the accuracy of the return and payment of tax.
- One spouse is unwilling or unable to consent to filing a joint tax return.
- One spouse knows or suspects the other spouse is omitting income or overstating deductions, and the spouse does not want to be held personally responsible for the other spouse's tax.
- The spouses live apart or are separated but not yet divorced, and they wish to keep their finances as separate as possible.
- The spouses live apart and one spouse would qualify for head of household.
In some situations, deciding to file separately rather than jointly is a mathematical decision based on analyzing the combined separate tax liabilities compared to the joint tax liability.
In other situations, deciding to file separately is a decision based on whether each spouse wants to accept full responsibility for the accuracy and payment of tax that comes with a joint filing.
For some couples, there are non-tax reasons for filing separately, such as keeping their finances separate from each other.
Same-Sex Married Couples
Same-sex married couples are allowed to file a joint tax return using the married filing jointly status. Or if they choose, they can file separate returns using the married filing separately status.
Previously, the IRS did not allow same-sex married couples to file jointly as section 3 of the Defense of Marriage Act only recognized marriages between a man and woman. The Supreme Court struck down section 3 of the Defense of Marriage Act as unconstitutional in the case of the United States v. Windsor. Following this Supreme Court decision, the IRS published Revenue Ruling 2013-17 (pdf, 15 pages), which provides guidance to same-sex married couples. In that revenue ruling the IRS said, "For Federal tax purposes, the terms 'spouse,' 'husband and wife,' 'husband,' and 'wife' include an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term 'marriage' includes such a marriage between individuals of the same sex."
Further, same-sex married couples are considered legally married as long as they were married in a state that recognizes same-sex marriage. Thus, same-sex married couples are considered married for tax purposes even if they are legally married in one state and reside in another state that does not recognize same-sex marriage. In Revenue Ruling 2013-17, the IRS states their position, "For Federal tax purposes, the Service adopts a general rule recognizing a marriage of same-sex individuals that was validly entered into in a state whose laws authorize the marriage of two individuals of the same sex even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages."
Domestic Partners and Civil Unions
Taxpayers who are in a registered domestic partnership or a civil union are not considered to be married, and so will need to file their tax returns as unmarried persons: using either the single or head of household filing status. In Revenue Ruling 2013-17, the IRS states their position, "For Federal tax purposes, the terms 'spouse,' 'husband and wife,' 'husband,' and 'wife' do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term 'marriage' does not include such formal relationships."
Furthermore, domestic partners and persons in a civil union who reside in a community property state may need to allocate income and deductions between each partner. This applies to domestic partners in the community property states of Washington, Nevada, and California.
- Internal Revenue Code section 6013 discusses joint returns by spouses.
- Treasury Regulations sections 1.6013-1 discusses joint returns in general.
- Treasury Regulations sections 1.6013-2 discusses filing joint returns after separate returns have already been filed.
- Treasury Regulations sections 1.6013-3 discusses joint filing after one spouse has died
- Treasury Regulations sections 1.6013-4 discusses various rules that apply to joint returns.
- Treasury Regulations sections 1.6013-6 discusses the choice available to nonresident alien spouses to be treated as a resident of the United States for tax purposes.
- Treasury Regulations sections 1.6013-7 discusses the choice to file a joint return in the situation where one spouse is a nonresident alien at the beginning of the year and becomes a resident alien by the end of the year.
- Internal Revenue Code section 7703 defines marital status for tax purposes; see also the related Treasury Regulations section 1.7703-1.
- Revenue Ruling 2013-17 (pdf, 15 pages) provides guidance to same-sex married couples, registered domestic partners, and persons in a civil union as to their marital status for federal tax purposes.
- Publication 17, Your Federal Income Tax, especially chapter 2 on filing status and marital status.
- Publication 501, Exemptions, Standard Deduction, and Filing Information, especially the section on married filing jointly.
- Publication 504, Divorced or Separated Individuals.
- Publication 555, Community Property.
- Publication 971, Innocent Spouse Relief.
- J.K. Lasser's Your Income Tax, chapter 1.3 through 1.10.