One of the first things you need to determine when preparing your federal income tax return is the filing status you qualify for. Two common filing statuses are married filing jointly and single. The filing status you are eligible for will have a significant impact on the amount of income tax you will owe to the Internal Revenue Service at the end of the year, with more taxes generally owed for one status than the other.
Under normal circumstances, with all other things being equal, a taxpayer who files as single will pay more income tax than one who files as married filing jointly. Generally, to file as a single taxpayer, you must be unmarried at the end of the tax year. This filing status tends to be the default status for all unmarried taxpayers since there are no other restrictions to using it. However, to use the married filing jointly status, you must be legally married by the end of the tax year and file a joint return that both spouses sign and consent to.
One of the two big differences between filing as single and married filing jointly is the standard deduction you are eligible to claim. During the 2011 tax year, for example, a single filer can claim a standard deduction of $5,800 if he chooses not to itemize deductions. In contrast, a married couple can claim twice that amount of $11,600. This higher standard deduction for married couples is available regardless of who earns more of the income, and even if one spouse earns no income at all. This is because the IRS treats married couples as each earning half of the income.
Income Tax Rates
The main advantage to filing a joint return, which is also the reason why single taxpayers pay more in tax, is that married couples use more favorable tax brackets. There are six tax brackets that each cover a range of income for which a specific tax rate will apply. As your income increases through the tax brackets, so does the tax rate that applies to that portion. When using the married tax brackets, the income ranges are much wider in that it covers larger portions of your income. This means that a married couple’s income can be the same as a single taxpayer’s, but the single taxpayer will pay tax at higher tax brackets.
Example of Savings
Suppose a married couple and a single taxpayer each have $34,500 of taxable income. The single filer will pay 10 percent on the first $8,500 and 15 percent on the rest for a tax bill of $4,750. In contrast, the married couple pays 10 percent on the first $17,000 and 15 percent on the remainder, with a total tax bill of $4,325.