Taxes are an integral part of our lives. No matter you are going through what phase of your life, whether its worst or the best you cannot neglect taxes. You getting married or going through a divorce, IRS needs its money. Taxpayers who are going through divorce usually face dilemma about what kind of filing they should use to file their returns: married filing jointly or separately. You can avail good amount of tax relief by filing taxes under married filing jointly. However, there are disadvantages apart from advantages attached to married filing jointly.
In case, you’ve not received your divorce decree or you’re not under a separate decree to maintain your finances by the end of the financial year, you will be considered as married for every tax related purpose whether its state or federal taxes. Therefore, you and your spouse have a choice of filing taxes jointly and you will combine your taxes, income and expenses in one return filing. After signing the return, you will not be able to make any kind of amendments in the tax filing and would not be able to change the status from married filing jointly to separately. There are several advantages of married filing jointly.
It’s understood that if you file jointly that amount of taxes will get reduced and the amount will be much less than if you had filed taxes under filing separately status. There are several tax credits and deductions you would be entitled to, if you file taxes under married filing jointly but in the case of married filing separately you will not be eligible for these deductions and credits. Another thing that makes married filing jointly better option than married filing separately is that joint tax brackets are higher. Therefore, you’d be paying lower amount of taxes. If both of you were raising your children, you can claim for child credits and deductions. However, you should first check the qualifications. Some of the tax credits and deductions that you can avail while filing your tax returns jointly are tuition fee deduction, deduction of loan of student loan, tax credits for expenses on higher studies and tax credit for child and dependent care expenses. In most of the cases, you will find that expenses for child and dependent care have been as tax credit.
In case, you are facing capital loss from last few years and filing taxes jointly, you can deduct amount up to $3000 which is just $1500, if you are filing separately. There are some disadvantages as well of filing taxes jointly. If your earnings fall in the category of higher incomes and you are filing jointly, you’d need to pay marriage tax penalty which will increase the amount of federal income taxes. Despite some disadvantages, married filing jointly is recommended by most of the tax experts if you are going through a divorce.
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