Have You Updated Your Status Lately?
No, not your Facebook or Twitter status, but your tax filing status. If you are married you have the option of filing your income tax return with your spouse, or separately. The decision you make might impact how much you owe, or how much is refunded to you. Several factors help determine your tax filing status, and an examination of these factors is key in reaching a decision that fits your specific circumstances.
In most cases the most beneficial filing status for married people is to file jointly. But, in some instances there are benefits to filing separately. The following tips will help you decide:
- Figure out what the tax rate will be for your individual income.
- Will you still be able to take advantage of helpful deductions when filing separately?
- Does filing separately eliminate certain tax credits?
- Will filing separately mean more work come tax prep time?
If you answered yes to most of these questions, filing separately from your spouse may not be the best choice. When losing the ability to take deductions that reduce your taxable income is the result, it is probably better to file a joint return. Likewise, if the amount of paperwork you will have to submit is doubled by filing separately, it is worth a second look at preparing a joint tax return. One instance where you would be benefited from filing separately is where your spouse is engaging in questionable tax reporting. If you suspect there are known errors or inaccuracies being reported, filing separately may protect you from audit or other investigation.
For an analysis of your specific tax circumstances and for help determining whether you should file separately or with your spouse, call our office for help. Let the professionals at Nielsen Law Group help you with all your tax related issues. Call (480) 888-7111 or submit a web request here.