The choices couples make, like so many other aspects of their marriage, are based on their unique circumstances. This is also not limited to choosing a filing status after getting married. Your filing status will change from single or head of household to married filing jointly or married filing separately once you marry, but many couples question, “What is my filing status now that I’m married?” and “Should I File Married Filing Jointly or Separately?”
Pros For Filing Jointly
In general, married couples who file jointly rather than separately earn larger tax benefits and, as a result, more money in their pockets at tax season. To be eligible for some tax credits, couples must submit a joint tax return rather than filing married filing separately. The following are some of the most common tax credits available to married couples filing jointly:
Child and Dependent Care Tax Credit (Up to $8,000 w/ 2 or more children)
Earned Income Tax Credit (Up to $6,728 for a family w/ 3 or more children)
American Opportunity Tax Credit (Up to $2,500 per person)
Lifetime Learning Tax Credit (Up to $2,000 per tax return)
Cons For Filing Separately
Couples who file separate tax returns receive fewer tax advantages. You will be taxed at a higher rate if you file two separate tax returns. The standard deduction for married filing separate taxpayers is $12,550 for 2021, which is much less than the standard deduction for married filing joint filers.
The following are some of the most typical downsides of filing a separate tax return:
The interest on student loans is not deductible
IRA contribution deductions are usually limited to a lesser amount
Those married filing jointly are ineligible for a number of tax advantages and incentives
Still Having High Tax Bills?
No taxpayer in their right mind wants to be hit with that tax bill, especially if it tends to be a struggle to pay off. The tax credit will not be enough to satisfy any tax debts individuals and families may have with the IRS.
But there is a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
How Simple Is Qualifying?
Considering that the Fresh Start Program is a federal program, you would think meeting the qualifications may be very difficult, but really, it’s a lot simpler and quicker than you think. Take the following steps in order to find out if you are eligible in as little as 3 minutes.
- Fill out some basic information about yourself and your back taxes here.
- Have a representative reach out to you to discuss your eligibility.
- Go through the enrollment process and finally reduce or eliminate your tax liabilities.