Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Married Filing Jointly

What it is:

Deciding to file jointly or separately is a personal decision for couples, and deciding which one is optimal depends on the couple's income and deductions. It is important to note that from a legal perspective, filing jointly means each spouse is legally responsible for the content of the tax return. Accordingly, if the IRS finds a mistake or assesses a penalty, both spouses are usually responsible for the consequences if they filed jointly.

How it works (Example):

Let's say John and Jane Doe are married. They sit down to file their tax returns for the year. They can choose to file jointly, or they can file separately. If they file jointly, they can combine their incomes and deductions on one return.

If they choose to file jointly, they may be eligible for certain tax deductions and tax credits that they may not qualify for by filing separately. In order to qualify to file jointly, the couple has to be married as of December 31 of the tax year.

Why it Matters:

Married filing jointly is a tax status that some couples use on their tax returns.