Federal tax filing can be a complicated process, especially if your filing status changes in the middle of a tax year. In general, your status for filing your federal taxes depends on whether you are considered unmarried or married on the last day of the tax year which is December 31st. Marriage is defined as a legal union between a man and a woman for the purposes of filing federal income taxes.
Criteria for Filing as a Married Couple
In order to file as a married couple, you must first determine if you fit the guidelines as outlined by the IRS to be considered married. A couple who is recently married can file as so if on the last day of the tax year the couple meets one of the following criteria.
- If you are living together as husband and wife.
- You are living together in a state that recognizes common-law marriage.
- You are married and living apart but not considered legally separated or divorced.
- You are separated but not considered divorced.
Once considered married in the eyes of the law you must file as a married couple for that tax year. There are a few details that you must take care of as a newly married couple for legal purposes.
- Work with your employer to adjust your tax withholdings to reflect a change in status and coordinate any other benefits available for married couples that can save you money.
- Inform the Social Security Administration of a name change, if applicable. In order to properly file your taxes, your legal name must match the name on your social security card.
- Decide as a married couple how you will file your taxes.
Those who meet the criteria of being considered legally married persons must file taxes in one of two ways.
Married Filing Jointly
A joint return can be filed as long as both parties agree and sign a joint return. On a joint return form, both incomes; allowable expenses, and deductions are combined. A joint return can be filed even if one party had no income or deductions to report for that tax year.
Filing jointly may put a couple into a higher tax bracket which has been a cause for some controversy in the past. When two incomes are reported together on a joint return, depending on the earnings, this naturally results in an elevated income level.
The marriage penalty is the term used to describe the circumstances when a married couple filing jointly ends up paying more income taxes than if each individual were to file individually. It is true that this sometimes does result in a higher tax penalty, however, in past years Congress has been working to reduce the tax bracket ceilings on joint returns to make them a bit fairer for joint filers. It is possible depending on the income level of a married couple filing jointly, that a marriage penalty may apply. It is also true that tax credits or other benefits may be applicable for couples filing jointly.