Congrats on tying the knot! Now that your status has changed, it’s time to make it tax official. As you get ready to file your first return as a married couple, here are a few things to know.
1. You can get the most out of your taxes by filing jointly
Because of the way the IRS writes tax code, married couples who file jointly can get higher breaks than they did when they were single. Some things like the Child Tax Credit or Student Loan Interest Deduction, for example, come with an income phaseout. That means that at certain income levels, the full deduction or credit, is reduced. By filing jointly, however, those phaseouts start at higher income levels, so you may be eligible for more now. We’ll guide you through all of these credits and deductions, finding the ones that match your tax situation to maximize your refund.
2. You can file separately, but it’s probably not worth it
While it might seem like filing separately would give you the chance to “double claim” certain things, it doesn’t. Only in rare cases does filing separately work for a married couple. Like we said, married filing jointly increases a lot of benefits on your taxes—the standard deduction is doubled from $12,400 to $24,800, income limits on certain deductions and credits are higher, and you only have to prepare one return for the both of you. If you really want, you can prepare separate returns and a joint one, to see how the two compare, filing whichever gives you both the best options. Keep in mind that you’ll have to file your state returns in the same way, either jointly or separately. You can’t file your federal return one way and your state return another.
3. When you’re done, consider updating both of your withholdings
A considerable life change, like getting married, is the perfect time to review both of your W-4’s and adjust your withholdings. It’s best practice for married couples to have mismatched withholdings. Meaning, the breadwinner should have the least amount withheld from their paychecks, while the person earning less should have the maximum withheld. Come tax time, this will help offset tax due because you’ll have maxed your withholdings throughout the year. You can work with your employers to update your W-4’s accordingly.