How to File Taxes As a Newlywed Couple
Check your tax brackets., Consider whether you have large deductions to take., File separately if the government will seize one spouse’s refund., Assess your unearned income., Analyze your capital gains and dividends specifically., Check whether you...
Step-by-Step Guide
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Step 1: Check your tax brackets.
About 95% of couples are better off filing jointly.However, it’s possible that you will pay more in taxes by filing jointly than you would if you filed separately.
In particular, if one spouse makes substantially less than the other, then filing jointly might take more taxes out of you.
For example, Mike makes $25,000 in his job as a receptionist.
Monica makes $140,000 as an attorney.
Mike’s tax rate will be much lower than Monica’s.
However, if they file jointly, then Mike’s income will be taxed at a higher rate.
You can check your tax rates by looking at Publication 505, Tax Withholding and Estimated Tax.
Alternately, you can use a tax calculator online. -
Step 2: Consider whether you have large deductions to take.
It sometimes makes sense to file separately if one person has allowable deductions that are very large.
For example, you can deduct medical expenses if they are more than 10% of your adjusted gross income.Let’s say Mike has been sick and has racked up $5,500 in medical expenses.
If he files jointly with Monica, their total income is $165,000.
Mike’s medical expenses don’t equal more than 10% of this amount, so the couple couldn’t take a deduction.
However, if Mike filed separately, then his expenses are more than 10% of his $25,000 salary. , If one spouse owes the government money (or back child support), then their tax refund could be seized.
However, if you file separately, then you can ensure that only that individual spouse’s refund will be taken by the government., Taxes created by the Affordable Care Act hit passive income, such as dividends, interest, or rental income.
You’ll pay
3.8% on unearned income if you make more than $250,000 combined.
If you file separately, then the tax doesn’t kick in until you make more than $125,000.In some situations, you can avoid the tax if you file separately.
For example, Heather and Teresa are married, and Heather makes $160,000 while Teresa makes $100,000.
All of Teresa’s income is passive.
Because she makes less than $125,000, she isn’t hit with the
3.8% tax if she files separately.
However, if she and her wife file jointly, then their income is over $250,000.
Teresa’s unearned income gets hit with the tax. , Capital gains tax rates increase from 15% to 20% when you have about $450,000 in joint income.In some situations it makes sense for a couple to file separately to get the lower tax rate.
For example, Jeff and John are married.
Jeff makes $400,000 while John makes $100,00 mostly from capital gains.
If they file jointly, then John’s income will get hit with a higher tax rate.
However, if he files separately, he’ll pay less in taxes on the capital gains. , Only couples filing jointly qualify to take certain tax credits or deductions.
You should assess whether you want to take these.
For example, only married couples filing jointly may take the following:
Credit for Child and Dependent Care Expenses Earned Income Credit Adoption Tax Credit education tax credits standard tax deduction for student loan interest others, which you should discuss with a tax professional , If you don’t know whether to file jointly or separately, you should consult with a tax professional who can provide expert advice.
The tax law changes regularly, and you’ll want tailored, updated advice.
Find a certified public accountant by contacting your state’s accounting society.
You may also find people advertising in the phone book or online. -
Step 3: File separately if the government will seize one spouse’s refund.
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Step 4: Assess your unearned income.
-
Step 5: Analyze your capital gains and dividends specifically.
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Step 6: Check whether you want to take certain credits or deductions.
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Step 7: Meet with a tax professional.
Detailed Guide
About 95% of couples are better off filing jointly.However, it’s possible that you will pay more in taxes by filing jointly than you would if you filed separately.
In particular, if one spouse makes substantially less than the other, then filing jointly might take more taxes out of you.
For example, Mike makes $25,000 in his job as a receptionist.
Monica makes $140,000 as an attorney.
Mike’s tax rate will be much lower than Monica’s.
However, if they file jointly, then Mike’s income will be taxed at a higher rate.
You can check your tax rates by looking at Publication 505, Tax Withholding and Estimated Tax.
Alternately, you can use a tax calculator online.
It sometimes makes sense to file separately if one person has allowable deductions that are very large.
For example, you can deduct medical expenses if they are more than 10% of your adjusted gross income.Let’s say Mike has been sick and has racked up $5,500 in medical expenses.
If he files jointly with Monica, their total income is $165,000.
Mike’s medical expenses don’t equal more than 10% of this amount, so the couple couldn’t take a deduction.
However, if Mike filed separately, then his expenses are more than 10% of his $25,000 salary. , If one spouse owes the government money (or back child support), then their tax refund could be seized.
However, if you file separately, then you can ensure that only that individual spouse’s refund will be taken by the government., Taxes created by the Affordable Care Act hit passive income, such as dividends, interest, or rental income.
You’ll pay
3.8% on unearned income if you make more than $250,000 combined.
If you file separately, then the tax doesn’t kick in until you make more than $125,000.In some situations, you can avoid the tax if you file separately.
For example, Heather and Teresa are married, and Heather makes $160,000 while Teresa makes $100,000.
All of Teresa’s income is passive.
Because she makes less than $125,000, she isn’t hit with the
3.8% tax if she files separately.
However, if she and her wife file jointly, then their income is over $250,000.
Teresa’s unearned income gets hit with the tax. , Capital gains tax rates increase from 15% to 20% when you have about $450,000 in joint income.In some situations it makes sense for a couple to file separately to get the lower tax rate.
For example, Jeff and John are married.
Jeff makes $400,000 while John makes $100,00 mostly from capital gains.
If they file jointly, then John’s income will get hit with a higher tax rate.
However, if he files separately, he’ll pay less in taxes on the capital gains. , Only couples filing jointly qualify to take certain tax credits or deductions.
You should assess whether you want to take these.
For example, only married couples filing jointly may take the following:
Credit for Child and Dependent Care Expenses Earned Income Credit Adoption Tax Credit education tax credits standard tax deduction for student loan interest others, which you should discuss with a tax professional , If you don’t know whether to file jointly or separately, you should consult with a tax professional who can provide expert advice.
The tax law changes regularly, and you’ll want tailored, updated advice.
Find a certified public accountant by contacting your state’s accounting society.
You may also find people advertising in the phone book or online.
About the Author
Kevin Perez
Professional writer focused on creating easy-to-follow practical skills tutorials.
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