Uncle Sam takes the position that marriage is a good thing, and the Internal Revenue Code reserves a few federal tax perks for those who tie the knot. Married couples are eligible for the largest standard deduction when they file together, and they can earn more before moving into the next highest tax bracket as well. Both factors typically result in a lower tax bill. But there’s a potential downside to the married filing joint status, too.
Filing Options for Married Couples
You have three choices for your tax filing status if you’re legally married:
- You can file a joint married return,
- A separate married return, or
- You might qualify for head of household status under some isolated circumstances if you’re not living with your spouse and you have a dependent.
Of these choices, married filing jointly is considered to offer the best advantages across the board. The head of household status isn't available to everyone.
You’ll Qualify for More Tax Credits
Married filing jointly is definitely preferable to filing a separate married return when it comes to tax credits. These are different from tax deductions, which can only reduce your taxable income. Tax credits subtract and potentially erase any tax you might owe the Internal Revenue Service.
You can’t claim the Earned Income Tax Credit, the Adoption Credit, the Child and Dependent Care Tax Credit or either of the two educational tax credits if you and your spouse file separate married returns, but these credits are all available to you if you file jointly.
The Standard Deduction
You’ll get a $12,400 standard deduction if you file a separate married return for the 2020 tax year. Double this to $24,800 if you’re married and file jointly.
The MFJ deduction works out to a separate standard deduction for each of you, but this can be a significant advantage if only one of you works or earns most of the income. That spouse can shave a significant $24,800 off their taxable income by "sharing" the other's standard deduction when they file jointly, and they can earn more without paying increased tax rates, just because they're married.
Then There Are the Tax Brackets
Married filers can earn double what a single taxpayer can – or what a married person filing a separate income tax return can – before moving into a higher tax bracket. For example, you won't hit the 24 percent tax rate until your joint incomes reach $171,051 in 2020. Otherwise, you'd hit this tax bracket at income of just $85,256 if you filed a single or separate married return – again, just half.
How Filing Jointly Works
The incomes of both spouses are entered on an MFJ Form 1040 tax return, and both spouses likewise share deductions, credits and their dependents. You can file this way even if only one of you had any income or only one of you paid for all the things that resulted in eligibility for credits and deductions during the tax year.
Just check off the MFJ filing status – the second box – on the first line of the 2020 Form 1040 tax return to claim this status. Both spouses must sign the return, but the IRS offers exceptions from this rule if one spouse is physically unable to do so because of injury or illness, or if they're serving in a combat zone. You'll have to submit a statement with your tax return explaining the circumstances to the IRS.
Qualifying for MFJ Status
You might think that qualifying as a married joint filer is pretty simple – you’re either married or you’re not. And that’s basically true. As long as you’re married, not divorced or legally separated by court order, you can elect to use this filing status provided that you both agree to do so. You don’t even have to be living together. You can be informally separated, such as by agreement or by a temporary court order.
But there’s a catch: You can’t claim this status if you divorce at any point during the year, even on Dec. 31. That makes you unmarried for the whole tax year, You can still file an MFJ tax return with your spouse if they die during the year, however, unless you remarry on or before Dec. 31. Otherwise, the IRS says that you were married to your deceased spouse for the whole year.
Common law marriages qualify if they’re recognized in the state in which you live, or in the state where the marriage began if you’ve since relocated. The IRS also recognizes same-sex marriages after two landmark Supreme Court decisions in 2013 and 2015, although registered domestic partnerships and civil unions don’t qualify.
You can file a joint married return if your spouse is a nonresident or dual-status alien as long as you elect for them to be treated as a resident alien for tax purposes for the entire tax year.
The Downside of Filing Jointly
Now for the bad news. The IRS views marriage as an absolute partnership. In tax speak, the Internal Revenue Code says that MFJ filers are “jointly and severally liable” for their tax returns.
This means that the IRS will hold each spouse responsible for 100 percent of any tax that’s due on a joint married return, even if one spouse earns just $15,000 and the other earns $150,000. The IRS can and will pursue the under-earning spouse for payment, including any interest and penalties, if you complete and file a joint return with taxes due.
You might think, "Good luck with that," if you have no or very negligible income, but the liability rules go a step further. You’re also both equally liable if your spouse underreports income or doesn’t really qualify for all those tax credits and deductions they claimed. The IRS can take action against either of you or both of you.
The IRS does offer some options if these situations occur, however. You can request innocent spouse relief, equitable relief or a separation of liability if you find yourself held jointly and severally liable.
Innocent Spouse Relief
Innocent spouse relief is appropriate if your spouse misrepresented income, deductions or credits on the jointly filed tax return that you signed. You must prove that this was done without your knowledge as of the date you signed the return, and that it therefore wouldn’t be fair to hold you accountable. You have two years to file for this type of relief, generally beginning with the date when you first heard from the IRS that there was a problem.
Separation of Liability
A separation of liability request asks the IRS to divvy up the resulting tax bill, charging only a fair portion of it to you. You’d have to establish that you and your spouse parted ways during the tax year due to divorce or a legal separation order. You can also establish that you and your spouse didn't live together at any time during the tax year in question if you don’t have a divorce decree or a separation order. You can ask for this type of relief if your spouse has died.
This rule is also subject to the two year deadline beginning with the date that the IRS first tried to collect the tax. You must file Form 8857 to request separation of liability.
Equitable relief is something of a last-ditch cry for mercy. It applies if you don’t qualify for separation of liability or innocent spouse relief, but your spouse nonetheless was less than honest when preparing the joint tax return that you signed, or they earned the vast majority of the income that resulted in a killer tax bill that's gone unpaid.
You have a little longer to seek relief from the IRS in this situation. You can do so for as long as the IRS is legally able to pursue the tax debt within its statute of limitations, but you’ll have less time if you’re asking for a tax refund. In this case, you have three years from the date the tax return was filed, or two years after any payment was made toward the tax, whichever is later. Again, you would file Form 8857 with the IRS.
Injured Spouse Relief
You can also appeal to the IRS if you and your spouse were expecting a tax refund but the refund was intercepted to offset a separate debt owed only by your spouse. This can happen if they're solely responsible for a previous tax debt, for a student loan debt or maybe they're behind with child support payments from another relationship.
You can request injured spouse relief and the IRS will send you your share of the refund if you can successfully prove that the debt in question was never your personal liability. You would file Form 8379 with the IRS in this case to request injured spouse relief.
Hopefully, your marriage was indeed made in heaven so you can file jointly and claim all the associated tax benefits. Otherwise, the IRS might take pity and cut you a break under these special circumstances.
Which Filing Status Is Better?
Experts suggest that you prepare your taxes both ways – complete a separate return and a joint married return – if the joint tax liability rules make you feel a bit queasy. There’s no rule that says you must file a joint return just because you’re married. Figure out how you would personally fare dollar-wise in each scenario. If the difference isn’t that jarring, you might want to play it safe and file a separate married return.
- TurboTax: Should You and Your Spouse File Taxes Jointly or Separately?
- H&R Block: What Is the Benefit of Married Filing Jointly vs. Married Filing Separately?
- IRS: Publication 501
- IRS: Topic Number 205 – Innocent Spouse Relief
- IRS: Instructions for Form 8379
- IRS: Form 8857
- IRS: Form 8379
- Congressional Research Service: The Federal Tax Treatment of Married Same-Sex Couples
- IRS: IRS Provides Inflation Adjustments for Tax Year 2020
- Tax Foundation: 2020 Tax Brackets
- IRS: Form 1040 U.S. Individual Income Tax Return
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Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.