Married Filing Taxes Jointly – All You Need to KnowMarch 9, 2023
In the US, taxpayers use different tax-filing statuses when filing their returns. Married couples need to choose which status to use. Many married couples file taxes separately, but there is also a good number of couples that file taxes jointly. Filing jointly has advantages as well as disadvantages, just like filing separately. Want to learn more about married filing taxes jointly, continue reading.
First, what are the benefits of filing taxes jointly?
Married couples with a source of income need to file their tax returns every year if they are qualified. By qualified I mean that they must have earned $24,400 in 2019 when filing tax returns in 2020. Before we dig deeper into this, it’s essential we highlight a few benefits of married couples filing taxes jointly. One of the main benefits is that they qualify for multiple tax credits and deductions. For instance, most married filing jointly can enjoy a higher earned income tax credit, lifetime learning education tax credits, child and dependent care tax credit, and more. Thanks to the credits and deductions, they are likely to pay lower federal income tax compared to when they file separately.
Tax brackets for married filing jointly
When paying taxes, you need to understand how tax brackets work. There are 7 tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. These tax brackets show the federal income tax rates, and in the US, we have a progressive tax system. This means that the individuals with higher incomes are subject to higher income tax rates. With the help of the married filing jointly tax brackets, you can easily calculate the amount of income tax you will pay to the government as a couple.
For instance, a couple filing jointly earning between$19,401 to $78,950 is subject to an income tax rate of 12%. When it comes to a couple earning from $78,951 to $168,400 is subject to an income tax rate of 22%. In addition to that, a married couple filling jointly and earns between $168,401 to $321,450 is subject to a tax rate of 24% when filing tax returns for year 2019 in 2020. Other tax brackets for married filing jointly include;
- 32% for incomes $321,451-$408,200
- 35% for incomes $4082001 – $612,350
- 37% for incomes $612351 and above
Which tax filing status should you use?
When married, you can either file taxes jointly or separately. Filing jointly has its own share of advantages, just like filing separately. However, your aim is to make sure you pay a lower tax bill or even get a tax refund. The best way to determine which is ideal is to prepare your return both ways, and see which way gives you the bigger tax saving.
There is a progressive tax system in the US. If you have a higher income you will be subjected to a higher federal income tax rate. If married, you can file your taxes jointly or separately. However, you don’t have to do all that if you use H&R Block online tax filing to prepare your tax returns. That way, you will use the most appropriate filing status that helps you save big when filing your taxes.