Do Your Taxes Yourself
Do Your Taxes Yourself Like A Pro With The Help Of These 10 Tips
It’s hard to visualize taxes as being romantic in any way. But, they are a part of life, and now that you’re married, you can still do your taxes yourself. When you were single, taxes were a bit different, and now, as a newly married couple, you’ll be faced with more changes.
Don’t feel bad though, every married couple goes through this, and you’ll need to make careful decisions. One of the first is to decide the best way to file your own taxes…married filing jointly or married filing separate returns. It may sound easy on the surface, but sometimes it involves careful planning.
When you file with the tax status of married filing jointly, in simple terms, it means that you combine everything and file one tax return. There is no requirement that a joint return be filed…you can file separately if you so desire. Filing separate returns usually means paying more taxes, but there are situations where it must be done.
Who’s eligible to file joint returns?
To qualify for filing a joint return, you must be married on or before December 31 of the tax year being filed.
The procedure of filing your own taxes as married joint is pretty much the same as filing single or any other status. What’s required is that you have to report all income, deductions, and credits on one single tax return. One difference will be the tax rate that is applied to your taxable income.
If you’re newly married, before you do your taxes yourself, there are a few items you need to take care of.
1. If either spouse had an address change, the IRS needs to be notified. You can do this by filing IRS Form 8822.
2. The spouse that had the address change also needs to notify their employer. If the wife took the husband’s last name, the employer needs to know that too.
3. The Social Security Administration needs to be notified as well if there has been a name change. This should be done as quickly as possible, and must be done by visiting one of their offices. This can’t be done online as certain documents must be presented. When tax returns are electronically filed, the first thing that is done is a name and SSN match with Social Security. If they don’t match, the return is rejected.
Those who are married close to the end of the year, and have notified Social Security, may have to file using the maiden name because of slow processing time.
Can a widow or widower file a joint tax return?
If one of the spouses died during the tax year, yes, the surviving spouse can file a joint tax return for that year.
If the surviving spouse has a dependent child, except a foster child, he/she can file as a qualifying widow or widower for the next two years at married filing joint tax rates.
File as married separate or married joint
Either option is available to a married couple. The couple needs to evaluate their financial situation and decide. It’s extremely important to have that meeting with your spouse before marriage or immediately after, and lay all cards on the table. List all debt in detail, assets owned, and especially contingent liabilities.
When is it advisable to file separately?
The filing status that we recommend for married couples is to use the one that saves you money. In most cases, filing separate costs a little more in taxes. There are many cases where filing separate is advisable, and we’ll list a couple of them here.
1. One of the spouses has unpaid federal taxes
If you file a joint return in this situation, and a refund is due, the IRS will take the entire refund to apply against the unpaid taxes. On a jointly filed return, the obligation to pay is joint and several, which means you both owe the money. Do your taxes yourself separately.
2. One spouse suspects that the other spouse isn’t reporting all income
When you file a joint return, you’re both liable for the accuracy of the return, and both are liable. Again, file your own tax return separately.
3. One spouse has delinquent student loans
This one is tricky. Student loans taken out after marriage become joint liability, but some before marriage have other conditions attached to them.
Does filing married jointly have any advantages?
There are many advantages to doing taxes yourself online, filing jointly.
1. Increased standard deduction
If you file married jointly, the standard deduction is $25,100 in 2021. Filing married separately, the standard deduction is $12,550. This alone gives joint filers a big advantage.
2. Joint filers are eligible for tax credits
Tax credits can be a substantial savings on taxes. They actually reduce taxes dollar for dollar instead of a reduction in gross income. When you file separate returns, you won’t be eligible for the following credits:
Adoption credit
Earned income credit
Elderly & disabled credit
Child & dependent care credit
Education credits
3. It takes more time
If you decide to file separate returns, it not only takes longer, but will cost you more in preparation fees if you use a tax professional or even an online tax filing site.
4. Joint returns are less complicated
There are different rules you have to follow when filing separately. If there is a dependent child, only one of you can claim him, plus you both have to file the same way. That is, if one itemizes, the other must also itemize even if no deductions are available to itemize.
Summary
For a newly married couple, taxes are not very complicated, even if it requires filing separate tax returns. Most of the time, you will be able to do taxes yourself by filing a married joint return. But, if there are unusual circumstances like we mentioned above, and you find it better to file separate returns, you might want to consult with a tax professional.
If you’re comfortable though, and want to try doing taxes yourself online, you can do your returns with us to see what they look like with our free trial here.
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Gust Lenglet – Platinum Author
