There are certain circumstances in which filing separately can be beneficial to financial condition when while you are married. The Internal Revenue Service (IRS) considers a couple married when they legally marry under state law, live together, or are separated but with no signed divorce by the end of the current tax period.
Having Similar Incomes
It may be beneficial for couples with similar incomes to file separately when both sides earn approximately the same amount. When comparing the amount of tax capital due under both statutes, combining earnings will place the couple into a higher bracket. However, investments, dependents and other factors may affect whether filing separately is optimal even when incomes are approximate.
Using Deductions
Tax deductions will lower taxable income, but in order to be of use they must add up to more than two percent of the couple’s adjusted gross amount. Spouses with union dues, occupation searches, and tax preparation fees may find that their miscellaneous deductions will not qualify with the couple’s combined rate.
Protecting Yourself
If you don’t want to be liable for your partner’s tax bills, choosing to file separately will offer financial protection. The IRS won’t apply your spouse’s refund to your balance due. Separate returns can prevent the Internal Revenue Service from taking a spouses’ refund when your partner has fallen behind on certain types of payments.
Conclusion
Filing your taxes separately from your significant other can lead to many beneficial outcomes. Make sure to discuss the decision of your filing status with your partner before the next upcoming tax season.
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