When to file taxes jointly versus separately

Feb 1, 2024

Marriage, Financial planning

Benefit of filing separately or jointly as a married copple
Benefit of filing separately or jointly as a married copple

When you get married, your focus may be on buying your first home, merging your finances, or planning to have a baby. You’re probably not thinking about the tax implications of being married.

 

Benjamin Franklin said it best, "nothing is certain except death and taxes." Taxes aren't the most fun topic at the dinner table, but most couples don't realize that understanding taxes can often mean paying less in taxes and keeping more for your new life together.

  

Let’s take a closer look at how a couple’s tax filing status changes, the differences between filing jointly vs separately, when it can be beneficial for modern couples to file separately, and more.

 

How your tax filing status changes when you get married


Before you got married, fewer options meant that your taxes were simpler. Once you're married, you'll get to choose if you want to file married filing jointly or married filing separately as a married couple.

 

If you’re unsure which year you should update your filing status, it’s simply based on the calendar year your marriage license is issued.

 

For example, if you get married in June 2024, the 2024 tax return that you file by April 2025 will need to be submitted as married filing jointly or married filing separately. 

Even if you were single for 11.5 months of the year and were only married for the last two weeks of December 2024, you would still file your entire 2024 tax return as either married filing separately, or married filing jointly.

 

Does getting married help or hurt your tax bills?

 

For the majority of couples, getting married will either have no impact on taxes or result in tax savings. 

Although, it’s also worth being aware that about one percent of  couples can experience a marriage penalty tax when they tie the knot. Couples who owe more in total taxes with a married filing status vs what they would owe as two single individuals combined experience a marriage penalty tax. 

This typically occurs when a married couple has a combined income of more than $731,200 and up to $1,218,700 (based on the 2024 Federal Marginal Income Tax Brackets).



What is the difference between married filing jointly and married filing separately?

  

Married filing jointly is the filing status that 95% of married couples elect when they file taxes. Both spouses input all their combined income, deductions, credits, and exemptions into one tax return with both of their names on it. For most couples, choosing the “married filing jointly” filing status results in the lowest taxes.  

 

Married filing separately is the path less followed. Although married filing separately may sound like something only intended for couples who have split up, that’s not the case at all. It simply means that each spouse reports their own income, deductions, credits, and exemptions on two separate tax returns.

 

It’s important to note that the IRS requires both spouses to file using the same deduction method. In other words, couples who elect to file separately must agree to both file their returns using the standard deduction or to both file using itemized deductions. This selection can't be mixed and matched across a couple’s two separate returns.

For 2024, the standard deduction amount for singles is $14,600, $29,200 for married couples and head of household. Everybody gets to take the standard deduction to reduce their taxable income. However, if your itemized deductions are greater than your standard deduction, choose the former to save more on taxes. 

 

Also, be aware that deductions can only be claimed by one spouse even if both spouses paid for the expense. However, you can choose to split a deduction, and each claim your own portion of it as long as the combined total doesn’t exceed the total deduction amount.

 

When do you have to decide on filing jointly or separately?


The IRS allows married couples to choose which filing status they want to elect every tax year. Couples can even flip back and forth between the two filing statuses from one tax year to the next.


There is no limit to how often married couples can switch between the two filing statuses during their marriage either.


Couples can even file an amended return to switch filing status from joint to separate, or vice versa, on returns filed within three years from the due date of the original return.


Benefits of married filing separately


In most cases, filing jointly results in lower taxes. married couples are best suited to file jointly. So, when is married filing separately better? Here are some example scenarios.


  • Medical deductions - If one spouse has a large amount of out-of-pocket medical expenses they want to deduct such as Lasik surgery and egg freezing, filing separately can make it easier to qualify using only one income (deductions are available if they exceed 7.5% of your adjusted gross income).

  • Student loan repayment plans - Qualifying for a student loan repayment plan can be easier when filing separately due to using only one income. 

  • Casualty losses - Natural disasters may grow more frequent. Couples who live in federally declared disaster areas and have a higher combined income, may receive higher deductions by filing separately.

  • Lower tax bracket potential - Two working spouses making about the same amount of money may pay lower tax rates if they file separately vs together if they land in a lower tax bracket.

  • Refund vs taxes owed - If one spouse is due a tax refund while the other has a large tax bill, filing separately can be beneficial. It can protect the refund for the spouse who overpaid and it will not get applied to the other spouse’s balance owed. This is most relevant for couples who have not fully joined their finances.

  • Separation of finances and liabilities - Separating financial responsibilities may be easier by filing separately. If a couple is planning to divorce, filing separately can also make it easier to see who owes and is responsible for what. 


There are situational benefits to married filing separately in terms of taxes, ownership clarity, credits, deductions, and privacy in some cases.


Benefits of married filing jointly


Now let’s look at all the benefits of married filing jointly filing status.


  • Lower Tax Rates - The tax brackets are wider for married joint filers, meaning more income is taxed at lower rates. This often results in less total tax owed.

  • Larger Standard Deduction - Married couples filing jointly get double the standard deduction than filing separately. This could be beneficial if one spouse has income below the single standard deduction amount. If so, the excess standard deduction could get carried over to the spouse that makes more. For 2024, the standard deduction is $29,200 vs $14,600 respectively.

  • Certain Tax Credits - Married couples filing jointly may qualify for several tax credits they would not have if they filed separately, including the Earned Income Tax Credit, Child and Dependent Tax Credit, and American Opportunity and Lifetime Learning Education Tax Credits.

  • Combined Deductions - Joint returns allow couples to combine deductions for things like medical expenses, charitable gifts, and business expenses under certain limits. In some instances, the combined itemized deductions could allow for greater tax savings. 

  • Reduced Taxable Social Security - The formulas for making Social Security benefits taxable may be more beneficial for married joint filers, which means lower taxes.

  • Contribution Limits - Limits on retirement plan contributions like IRAs often depend on marital status and joint vs separate filing. The limits for joint filing are typically better suited for most couples.


Is it better to file jointly or separately?


Most couples benefit best from filing together. The advantages really come down to incentives in the tax code meant to provide relief and simplify filing for most married couples. Although there are always exceptions, married filing jointly usually results in overall lower taxes.


If you're not sure - an easy starting place is an online marriage tax calculator that takes into account the biggest deductions / credit difference.


If you're still not sure or you have more unique circumstances (like business or medical expenses), try a tax filing tool that allows you to try each path. 


If your taxes are still more complicated than what a tool easily lets you understand, it might be time to consider hiring a tax professional.


Keep in mind, taxes can get extremely complicated especially since everyone’s situation is unique as their fingerprints. Plus, tax laws, rates, and deduction rules have been known to change frequently. 

We encourage you to speak with a tax professional if you want to learn more about what’s best for your filing status, deductions, rates, and taxes owed. The information provided in this article is not tax advice and is offered for general educational purposes only. If you have tax-related questions or require assistance with tax preparation and filing, please consult a licensed tax professional or qualified attorney.


Get better with money matters together


As a modern couple who carefully makes financial decisions, it's worth reviewing which tax filing status offers you the most savings each tax year. This way, you can grow your wealth faster.



At Plenty, we help modern couples make better financial decisions. We bring you and your partner together on money, helping you communicate better and achieve your financial goals sooner. It's your easy, modern solution for managing money as a couple.


Sign up for an account with Plenty today!


- Team Plenty

 

THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT OR TAX ADVICE. Plenty was founded to democratize access to financial products and tools that accelerate wealth building.  Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information. For general disclosures, please see this link.



Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.


Plenty was founded to democratize access to financial products and tools that accelerate wealth building. Plenty Financial and affiliated entities. (“Plenty Financial”) provide a web, mobile, personal financial management and educational platform to consumers; some of these tools are freely accessible to all consumers, others require a fee-based subscription. Advisory services are provided in the form of software-first financial planning and investment advisory services for fee-based Subscribers. Plenty Financial RIA, LLC is an SEC-Registered Investment Advisor. All investments made are legally owned by you. Investing is inherently risky and Plenty does not guarantee positive performance. Investments are held in accounts at BNY Mellon | Pershings, the world's largest securities servicing company and are SIPC insured. Investing involves risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.


Brokerage services are provided by Atomic Brokerage LLC "Atomic Brokerage", member FINRA and SIPC. Clearing and custody services are provided by Brokerage firm BNY Mellon Pershing, member SIPC. Plenty Financial RIA, LLC has a relationship with Atomic Brokerage to manage and execute investments on behalf of customers. Subadvisory services are offered through Atomic Invest LLC ("Atomic Invest"), an SEC-registered investment advisor, member SIPC. Atomic Invest was formerly known as Helium Advisors LLC.


Return data used in the interactive tool are hypothetical performance data which contains inherent limitations and is not a substitute for actual investment returns derived from a live portfolio. There are numerous risk factors related to trading and markets which cannot be fully accounted for when depicting Hypothetical Performance. Consequently, future returns are not guaranteed, and a loss of principal may occur. THIS IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE. This site/application has been prepared by Plenty and is not intended to be (and may not be relied on in any manner as) legal, tax, investment, accounting or other advice or as an offer to sell or a solicitation of an offer to buy any securities of any investment product or any investment advisory service. The information contained in this site/application is superseded by, and is qualified in its entirety by, such offering materials. This site/application may contain proprietary, trade-secret, confidential and commercially sensitive information.


By accessing this site, you signify your agreement with and understanding of the following Terms of Use and Legal Information pertaining to both this site and any material in it. Plenty owns and maintains this site. No act of downloading or otherwise copying from this site will transfer title to any software or material at this site to you. Anything that you transmit to this site becomes the property of Plenty, may be used by Plenty for any lawful purpose, and is further subject to disclosure as deemed appropriate by Plenty, including to any legal or regulatory authority to which Plenty is subject. Plenty reserves all rights with respect to copyright ownership of all material at this site, and will enforce such rights to the full extent of the law.