The IRS doesn't require that married couples must file joint income tax returns simply because they've tied the knot. Spouses have the option of filing separate married returns and some do, for a variety of reasons.
Filing jointly usually provides more in the way of tax relief, but it can come with some negative results as well. Considering several factors can help you determine which option is right for you and your spouse.
Married Filing Jointly
You and your spouse are eligible to file a joint tax return if you're considered to be legally married on December 31, the last day of the tax year. You can file a joint 2020 return in 2021 if you were legally married on Dec. 31, 2020.
You'll be entitled to a larger standard deduction if you file jointly with your spouse, and the tax brackets for this status are also more generous. Married taxpayers who file separate returns are barred from claiming certain tax breaks, but they’re only liable for the accuracy of the information on their own returns, and for paying any tax due on their own separate returns.
The rules and tax provisions for filing joint married returns apply to same-sex spouses as well as to spouses of the opposite sex, but not to registered domestic partners.
Rules for Filing a Joint Return
"Legally married" is the catch term here, and it's open to some interpretation. According to the IRS, you're married if you don't have a divorce decree or judgment issued by a court on or before December 31, even if you filed for divorce earlier in the year. Your divorce must be final by the last day of the year.
You can't be legally separated by court order, either, and file jointly, although it's not mandatory that you and your spouse actually live together. You can live apart as long as a court hasn't issued an order governing the terms of your separation.
A separation agreement entered into between spouses is considered to be a contract, not a court order, like a legal separation. You can still file jointly if you've entered into a separation agreement.
Both you and your spouse must also agree to file a joint return and you must both sign it.
Married Jointly Affects Your Standard Deduction
Taxpayers have a choice between itemizing their deductions or claiming the standard deduction, but they can't do both. This rule applies to all taxpayers.
The standard deduction for the married filing jointly status is the largest available. As of tax year 2020, the return you'd file in 2021, the standard deductions are:
- $24,800 for married taxpayers filing jointly
- $24,800 for qualifying widow(er)s
- $18,650 for heads of household
- $12,400 for married taxpayers filing separate returns
- $12,400 for single taxpayers
These figures are indexed for inflation, so they tend to increase slightly from year to year.
Tax Rates for Single vs. Married Filing Jointly
A taxpayer's filing status also determines tax brackets and which schedule of tax percentage rates are used. These brackets for taxpayers who are married and filing jointly for 2020 are applicable to the return you'd file in 2021:
|Rates for Married Filed Jointly|
|10%||$0 to $19,750|
|12%||$19,751 to $80,250|
|22%||$80,251 to $171,050|
|24%||$171,051 to $326,600|
|32%||$326,601 to $414,700|
|35%||$414,701 to $622,050|
|37%||$622,051 or more|
Tax rates and brackets for married individuals who file separate returns are the same as those for single filers. These brackets apply to separate filers in 2020, the return you’d file in 2021:
|Rates for Married Filing Separately|
|10%||$0 to $9,875|
|12%||$9,876 to $40,125|
|22%||$40,126 to $85,525|
|24%||$85,526 to $163,300|
|32%||$163,301 to $207,350|
|35%||$207,351 to $518,400|
|37%||$518,401 or more|
These spans of income covered by each tax bracket are also indexed for inflation.
These are progressive or "marginal" tax rates. A higher percentage doesn't kick in until your income reaches that particular income threshold, and then only your income over that threshold is taxed at that percentage. For example, the first $19,750 would be taxed at 10% and only one extra dollar would be taxed at 12% if you and your spouse earn $19,751 in 2020.
The Risks of Filing a Joint Married Return
It might seem like a no-brainer to choose the married filing jointly status given the tax brackets and standard deductions, but filing jointly comes with some drawbacks. Both spouses must report all their incomes, deductions, and credits on the same return when they file jointly. Both accept full responsibility for the accuracy and completeness of that information. The IRS refers to this as being "jointly and severally liable."
Each spouse is responsible for providing documentation to prove the accuracy of the tax return if it's audited by the IRS. Each is held personally responsible for the entire payment if any tax that's due and owing is unpaid. The IRS doesn’t divide the tax debt 50/50 between them.
The IRS does recognize that not all marriages are perfect unions, however, and it will sometimes grant exemptions from joint liability through innocent spouse relief, separation of liability, or equitable relief, depending on your personal circumstances.
The rules for these types of relief are complicated, so see a tax professional for help if you find yourself in this situation.
Married Filing Separately
Filing a separate married return provides relief from joint liability. Each spouse is only responsible for the accuracy of their own separate tax return and for the payment of any separate tax liability associated with that return. But married taxpayers who file separately lose their eligibility for quite a few tax deductions and credits, so they can end up paying more in taxes.
Filing separately can nonetheless be advantageous in a few situations:
- When you and your spouse combine the taxes due on your separate tax returns, the total is the same as or very close to the tax that would be due on a joint return. In this case, filing separately achieves the goal of maintaining separate responsibility for the accuracy of the returns and the payment of tax but without any additional liability.
- One spouse is unwilling or unable to consent to file a joint tax return.
- One spouse knows or suspects that the other is omitting income or overstating deductions. The innocent spouse doesn't want to be held personally liable for the other spouse's tax or misrepresentations.
- The spouses live apart or are separated but not yet divorced. They want to keep their finances as separate as possible.
- The spouses live apart and at least one of them would qualify for the advantageous head of household filing status if they didn't file together.
Qualifying Widow(er) Status When One Spouse Is Deceased
The tax code allows you to file a joint return with your spouse for the tax year in which they die, then you might be able to file as a qualifying widow(er) for two more years going forward, or perhaps as head of household. Otherwise, you'd then have to file as a single taxpayer.
A qualifying widow(er) can’t remarry during the two years during which this filing status is available, and they must have a child or stepchild who they can claim as a dependent and who lived with them through the entire tax year. Foster children don't count.
Head of Household Filing Status
Qualifying as head of household is subject to similar rules. Both filing statuses require that the taxpayer paid more than half the cost of maintaining their home during the tax year, but child dependents only have to live with the taxpayer for more than half the tax year, and some adult dependents qualify, too, although certain rules apply.
The taxpayer must be "considered unmarried" and cannot have lived with their spouse at any point during the last six months of the year to qualify as head of household, although death supersedes this last requirement.
Slightly different rules apply to the qualifying widow(er) and head of household filing statuses, and some can be complicated. Check with a tax professional to find out if you're eligible before claiming either of these statuses—or assuming that you can’t.
Same-Sex Married Couples
Same-sex married couples can file joint tax returns using the married filing jointly status, or they can file separate returns using the married filing separately status. But taxpayers who are in registered domestic partnerships or civil unions are not considered married under federal law, so they must file their returns using either the single or head of household filing status.
The IRS has indicated that the relationship must be recognized as a marriage under the laws of the couple’s state.
The Bottom Line
Experts recommend preparing your taxes both ways to determine which option makes the most financial sense for you if you're unsure what's best for your situation. Personal issues should also be taken into consideration, such as if you’re not sure your marriage is on firm ground. Consider consulting with a tax professional to make absolutely sure what’s right for you.