Together or Separate: How to File Tax Returns for Couples Married in 2022

So, you said yes in 2022 - and now you are married. But this is where the questions begin. And one of them is how to file a tax return. Edition USA Today tried to figure out who is more profitable to file a joint declaration, and who - an individual one.

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This is an age-old predicament that couples face every year due to the advantages and disadvantages of each option. A rash decision can be more costly or result in you missing out on huge tax credits and deductions, resulting in a smaller tax refund.

For example, the standard deduction for couples applying jointly this year is $25 versus $900 for individual applicants.

For newlyweds who aren't yet homeowners, this makes a lot of sense, as it makes more sense for them not to file an itemized expense return but to use standard deductions, says Tim Spies, a certified public accountant and partner at EisnerAmper in New York.

But there are still many nuances that need to be taken into account before you make a final decision.

What does it mean to file a joint declaration?

If you are single, the only way to file your tax return is on an individual basis. But if you are married, then you have a choice: you can apply jointly or each separately.

On the subject: Tax calendar for 2023: when to wait for important forms and file a return

Filing a joint tax return means that your income and that of your partner are combined. Joint income is subject to different tax brackets than the income of a single applicant.

This year, the Internal Revenue Service (IRS) raised the thresholds for tax returns to adjust for inflation.

Married couples filing a joint tax return:

• 35% for income over $431
• 32% for income over $340
• 24% for income over $178
• 22% for income over $83
• 12% for income over $20
• 10% for incomes less than $20

Marginal tax rates for individual taxpayers:

• 35% for income over $215
• 32% for income over $170
• 24% for income over $89
• 22% for income over $41
• 12% for income over $10
• 10% for incomes less than $10

Important to note: Filing jointly means you're both on the hook for money you and your spouse owed the IRS prior to your marriage.

What are the rules for filing a joint declaration

To file a joint tax return in 2023, you must be legally married by December 31, 2022. So if you received a marriage certificate in 2022, then you are considered married in the eyes of the IRS.

But if you divorced or legally separated from your spouse at any time during 2022, you are considered single or unmarried for the entire year and cannot file a joint return.

Finally, in order to file a joint declaration, both spouses must give their consent. This is why both signatures are required on the document.

Do you get more money if you file together

"When you file a joint return, that's usually how you get the largest legal refund," says Scott Kerley, co-CEO of FinishLine Tax Solutions, a tax consulting firm based in Houston, Texas.

This is because there are more tax deductions and credits that married couples who file joint registration are entitled to. For example, the Earned Income Tax Credit (EITC) is usually only available to married couples who file jointly. The EITC allows low-income families to deduct up to $6 from their taxes if they have three or more children.

2022 EITC Income Requirements - By link.

Similarly, the Adoption Credit and the Child and Dependent Tax Credit are only available to married couples filing a joint return. These credits can directly lower your tax bill and lead to larger returns.

In addition, jointly filing couples are subject to significantly higher income thresholds for each paying the maximum deductible IRA contribution of $6000.

When a married couple should not file jointly

If you had a lot of personal medical expenses last year, it may make sense to file a separate return. This is because the tax code allows you to deduct out-of-pocket medical expenses that exceed 7,5% of your adjusted gross income. When you file a joint return, you have one adjusted gross income to which the 7,5% rule applies.

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For example, if you had $15 in medical expenses last year on an adjusted gross income of $000, you can deduct $70 ($000 x 9% = $480; $70 - $000 = $7,5). Whereas, if you filed a joint return and your adjusted gross income was $5, you would not be able to deduct medical expenses ($250) since they do not exceed 15% of income.

It makes no sense to file a joint declaration if one of the spouses has a significantly lower income, adds Spies. This is because the lower-income spouse is eligible to claim more detailed deductions if they file individually.

Also, if you don't owe anything to the IRS and your spouse does, then when you file jointly, your tax refund can be applied to the account that the partner has accumulated with the IRS.

"The system doesn't discriminate between parties if they file documents jointly," FinishLine's Kerley said. But if you apply separately, you will not be responsible for your partner's tax burden.

Kerley says "dozens" of his clients have had this problem over the years because one spouse wasn't open with the other about how much money he owed the IRS.

He recommends discussing this with your partner before tying the knot.

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