Hi , changing my status from single to married slashes my fed refund by 1000$ , why is that?

[JulieR · Accepted solution]

Though I do not know the details of you and your spouse's income and withholdings, generally, when married filing jointly,  the joint income can put the couple in a higher tax bracket, therefore, a higher rate of taxes. Now that you are married you must file a married return regardless. You may opt to file married separately but this filing option generally yields lower refunds than the joint option because it makes the household ineligible for certain credits.

[grusha11]

Hi Julie, it makes sense what you said, but I am filing separately from my spouse, and my income didnt change last year. Any other factors that can cause the lesser refund?

[grusha11]

Julie, are you there ??

[Zbucklyo]

If you are married , you can't file as single anyway.  Married filing separately is the most disadvantageous way to file taxes.  Generally, you are more heavily taxed at the same levels of income compared to filing as single or married filing jointly.  The tax brackets are not the same.  

[VolvoGirl]

And there are several credits you can't take when filing separately, like the
EITC Earned Income Tax Credit
Child Care Credit
Educational Deductions and Credits

See …….
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately">https...>

[grusha11]

I get it all guys. Here is what doesn't make sense to me - If I were single in 2018 (as in not married to anyone) I'd get a substantially larger refund. I proved it by changing my life status back and forth.
I always thought being married, regardless of how I file (jointly or not) would guarantee give me a tax break, bc government wants more couples, kids, etc. etc.. But in my case , after getting married in September, which is the ONLY thing that changed from the tax perspective, I got penalized by 1 grand! Riddle me that 🙂

[Zbucklyo]

Not quite.  It is true that our representatives in Congress want married couples to file jointly - not separately.  So they penalize you for filing separately.  And for some couples, getting married increases their overall tax liability, for other couples it decreases it.  Yes, having kids lowers your tax liability, but single parents get a lot of the same tax credits as married couples when they have children.  

[VolvoGirl]

Why aren’t you filing Married Joint together with your spouse?  That is the best way.  

Unless you have a specific reason to file separate returns,
It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  
 
Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  

[grusha11]

No kids in my case.. just can't wrap my mind around the fact that being single is rewarded better than being married filing separately..

[VolvoGirl]

MFS is the worst way to file.  You lose a lot of credits and deductions and some things are limited.  How did your spouse file?  Talk to them about filing Joint.  You need to compare both your MFS returns to the one Joint return, not to your Single return.

And what state are you in?

[grusha11]

CT. She is not ready to file jointly yet, and I am not pushing for it either. I'd rather lose few grand 🙂

[VolvoGirl]

Well tell her Joint should be better.  At least do a test return as Joint to see. You can set up a new account to do a test return.  You don't have to pay unless you want to print or file it.  

[grusha11]

Thanks VolvoGirl. We'll do it next year. It was very interesting to see how government inadvertently favors single status over married.

[VolvoGirl]

No, not over married.  Over FILING SEPARATELY.    I think Joint should be better than 2 Single returns or the same..