Joint Return
Candlefocus EditorA joint return is a combination tax filing form used by married couples, allowing them to file their federal and state income returns together. This type of return offers several tax breaks and financial savings over filing separately, allowing married couples to combine their incomes and pay less in taxes.
Eligibility
In order to qualify for a joint filing status, spouses must be married by the last day of the year listed on the return and have not divorced or legally separated. Spouses who lose a partner during the year may qualify for a joint filing status as a “qualified widow or widower,” and must state this on the tax return.
Tax Advantages
Joint returns generally offer more deductions and tax credits than individual filing statuses do. For instance, the earned income tax credit is considerably higher for those filing jointly than it is for filing separately. Additionally, the tax rate under a joint filing status is often lower than it is for two separate returns.
Joint returns also include the opportunity for the filers to itemize the deductions. This allows married couples to both benefit from the higher deduction amounts offered through itemization.
Drawbacks
When filing jointly, the tax responsibilities a couple has are combined as well. This means that both spouses are legally and financially responsible for any debts or penalties incurred as a result of filing errors or malfeasance. Additionally, joint returns often cannot be amended later if the filers separate or divorce.
Income eligibility of certain tax credits and deductions also becomes restricted when filing jointly. While the deductions and credits may offer some savings to those filing jointly, those earning a high income may end up paying more under a joint filing status than if they filed separately.
Conclusion
Joint returns offer several advantages to married couples in terms of deductions and credits, and can be a great way to lower your tax bill. However, it is important to understand the risks as well as the rewards associated with filing jointly, and to carefully consider which filing status will benefit your family best.