There are tax-saving education benefits: When you file jointly you may qualify for a number of education deductions or credits that you wouldnít qualify for if you filed separately. For example, you must file jointly in order to take the deduction for interest on qualified education loans (student loans). You also must file jointly in order to benefit from education credits such as the Hope credit and Lifetime Learning credit.
In addition, when you file jointly you may qualify for the earned income credit, the adoption expense credit and the child and dependent care credit.
However, in some cases you can lower your combined tax bill by filing separately. Consider filing separately if:
You have large expenses: If you (or your spouse) have large expenses that must meet a minimum percentage of adjusted gross income (AGI) before qualifying as deductible, filing separately might be the best option for you. By filing separately, the expense is measured against only one spouseís AGI, making it easier to meet the minimum percentage requirement and allowing for more of the expense to qualify as a deduction. Items that fall into this category include medical expenses, casualty losses and miscellaneous itemized deductions.
Your spouse owes certain money: If your spouse owes unpaid child support or has defaulted on student loans, filing separately will keep your refund from being withheld by the IRS to repay your spouseís obligations.
You do not want to be responsible for your spouseís tax liability: If you file separately, you are only responsible for the return you file.
There are a few additional things that you should be aware of as you prepare your taxes for the first time as a married couple.
- If you changed your name, make sure to contact the Social Security Administration to have your social security number reflect your new name. If you neglect to do that and submit a tax return with your new name, the IRS computers won't be able to match the name with the number. A name-number mismatch could pose all sorts of tax problems, from delayed returns to disallowed deductions.
- If you bought your first home together, be sure to claim the interest from your mortgage, as well as any points you paid at closing. The downside is you must itemize your deductions in order to take advantage of this benefit, so you need to make sure your total deductions (state taxes, mortgage interest, home equity loan interest, property taxes charitable contributions, etc.) will exceed the standard deduction.
- If you moved to a new city because your spouse took a new job and you paid for the move yourself, you might be able to deduct your moving expenses.