Don’t you just love weddings? I do! And not only because they’re an opportunity to dress up, eat cake and dance the night away (although all of those things are delightful). I love weddings for accounting reasons too because, in many ways, joint tax returns are superior to single tax returns.

As you probably know, blissfully wedded couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages joint tax returns by extending several tax breaks to those who file together. The IRS gives joint filers a big, standard deduction each year, allowing them to deduct a significant amount of income immediately.

Couples who file together get to deduct two exemption amounts from their income and they qualify for a bunch of tax credits such as the Earned Income Tax Credit, the American Opportunity and Lifetime Learning Credits, exclusions or credits for adoption expenses and the Child and Dependent Care Credit. Hooray for credits!

Joint filers also receive higher income thresholds for certain taxes and deductions meaning they can earn a larger amount of income and still qualify for tax breaks Hooray x 2!

Couples who file separately are taxed more. They are automatically disqualified from several of the credits mentioned earlier. They may be excluded from deductions for student loan interest or tuition fees. Rarely is filing separately a good thing for a married couple.

Now, I won’t say it’s never the right choice since there are certain circumstances where you can benefit from separate federal tax returns. If you and your spouse are actually separated it makes sense to file married filing separately. If you are still married and you and your spouse haven’t lived together it makes sense to file married filing separately.  If like in my case, one party is self-employed and the other has a regular wage job and received W2 income it may make sense to file married filing separately.  At my firm, we always provide our clients with a married filing joint/married filing separately comparison to help taxpayers decide which way is best for them.

And the good news is that now, finally, everyone married in this country can make the decision to file married filing jointly or separately! Same-sex couples can file Married Filing Joint or Married Filing Separately on their federal return. The IRS looks to state or foreign law to determine whether individuals are married. The IRS recognizes a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a jurisdiction that does not recognize the validity of same-sex marriages. In other words, same sex marriage may not be legal in many Southern states, Georgia included, but if you got married in any of the 12 states where it is legal or in a foreign country that recognizes the union as legal, you can file as a married couple!

Just remember, this only applies to your federal return if you live in a state like Georgia. You’ll have to file Single or Head of Household on state tax returns in any state that doesn’t recognize same-sex unions. Don’t worry the Tax Heiress is here to help you with your first tax return with your spouse!

Lastly, for all of y’all married folks out there using tax software and trying to game the system by filing two head of household returns or one single and one head of household return you better beware! The IRS is coming for you!  This is TOTALLY illegal.  It doesn’t matter if you get a bigger refund filing this way.  Tax law is very clear – if you are married any time before December 31st of the tax year you have two options when it comes to filing your tax return and that’s it! I had a client come into the office just last week and asked if he could file single for 2013 because he got married in November and I promptly told him nope!  He ended up receiving a larger refund than usual (primarily because he and his spouse withheld as a single taxpayer during the year and then filed a married filing joint return).

There are only a few weeks left in the tax season so schedule your appointment today! This is not the year to go it alone!

Smooches,

Buffie the Tax Heiress