MFJ on federal tax information is a filing status. It stipulates the amount of standard deduction, tax rate schedule, and income limitations for tax benefits applicable to a taxpayer or, in this case, couple. There are five filing statuses total; married filing jointly (MFJ); married filing separately (MFS); surviving spouse; head of household (HH) and single.
Married Filing Jointly
To choose MFJ, a taxpayer must be married on December 31 of the applicable tax year and both persons must elect to use it. This filing status allows the couple to combine their gross income and deductions and file their returns togethert. The tax bracket for MFJ is then twice as broad as for married filing separately or single statuses.There are even some tax benefits you can't get if you're filing with married filing separately status, such as the Earned Income Tax Credit.
Death of a Spouse and Divorce
For a tax year in which one spouse dies, the other can still file MFJ if they choose. The IRS deems the couple to be married for the entire year. If a couple divorces or obtains a legal separation decree during any tax year, the IRS considers them unmarried for that tax year. The IRS only allows married taxpayers use of the MFJ status, so newly divorced couples are not eligible to use the status.
The IRS requires MFJ taxpayers to combine all income, personal and dependency exemptions and deductions. They also have joint responsibility for any tax liabilities or penalties, unless one of three conditions applies. These are innocent spouse, separation of liability – the couple is legally separated by last day of tax year – and equitable relief. Innocent spouse can provide you with tax relief if your spouse or former spouse didn't correctly report his or her tax burden to the IRS, and equitable relief may apply if the tax was reported correctly but not properly paid.The taxpayer files Form 8857 if she believes any of these to apply.
Income Limits and Exemptions Allowable
The IRS never considers a spouse to be a dependent, however taxpayers filing MFJ are eligible to use two personal exemptions through tax year 2017. In 2017, one personal exemption equals $4,050, so MFJ couples are eligible for $8,100 total. Income limits for MFJ taxpayers is twice that of a single taxpayer. The IRS encourages the use of IRS tax withholding tables rather than the traditional tax brackets in 2017 and 2018.
Starting in 2018, tax law changes are doing away with the entire concept of personal exemptions, though the standard deduction is rising from $13,000 to $24,000 for married couples filing jointly and from $6,350 to $12,000 for single people. For married couples with no children, that can mean lower taxes, though couples or single people with children will no longer receive exemption for those children,, so they could end up ultimately paying more tax. Personal exemptions are slated to return as of 2025, assuming Congress doesn't further change tax law in the meantime.
- Internal Revenue Service: Publication 501, Exemptions, Standard Deduction and Filing Information
- eFile: What Is the Earned Income Tax Credit (or EIC/EITC)?
- IRS: Updated 2018 Withholding Tables Now Available; Taxpayers Could See Paycheck Changes by February
- CNBC: Families Will Feel the Pain of Losing This Tax Break