What Does it Mean to File Single When Married?
When a married couple files taxes, they usually do so jointly, as a ‘married filing jointly’ status. This means that the couple’s joint income is reported to the IRS, and the couple can then use deductions, credits, and other applicable tax breaks. Filing single when married, however, refers to a situation where a married couple opts to file their taxes separately, as ‘single’ instead of ‘married filing jointly’.
Why Would Someone File Single When Married?
There can be a number of reasons why someone may choose to file single when married, although it’s important to remember that it’s not often recommended. Generally, filing single when married is done to take advantage of certain tax benefits that aren’t available when filing jointly. For example, a married couple might not be able to take advantage of certain credits or deductions when filing jointly, but they may be able to do so when filing separately.
Other reasons for filing single when married might include avoiding the restrictions that filing jointly can have on one partner’s ability to take deductions, or to avoid the liability that can come with filing jointly. Even if one partner has a higher income than the other, filing jointly can lead to paying more taxes than filing separately.
The Pros & Cons of Filing Single When Married
As is the case with most financial decisions, there can be advantages and disadvantages to filing single when married. Let’s take a look at the pros and cons of filing single when married.
Pros:
• Lower taxes: By filing single when married, couples may be able to reduce the amount of taxes they owe to the federal government by taking advantage of certain credits and deductions that may not be available when filing jointly.
• Avoiding liability: Filing jointly can put both partners on the hook for the taxes owed, whereas filing separately means that each partner is only responsible for their own taxes.
• Flexibility: Filing single when married gives couples more flexibility when it comes to taking deductions and credits, as well as the ability to choose different filing statuses.
Cons:
• Loss of tax breaks: While filing single when married can give couples access to certain deductions, it can also mean that couples will lose out on certain credits and deductions that are available only when filing jointly.
• Higher taxes: Depending on the situation, couples may end up paying more taxes when filing single than when filing jointly.
• Paperwork: Filing single when married can create a lot of extra paperwork, as each partner needs to file their own return.
Understanding the Possible Consequences of Filing Single When Married
Though filing single when married can offer certain advantages, it’s important to understand the potential consequences of making this choice. For example, couples filing separately may not be able to take advantage of certain tax breaks, such as the earned income tax credit, which is only available to couples filing jointly.
In addition, couples filing separately may end up paying more taxes than if they would have filed jointly. This is because filing joint returns can often result in a lower tax rate than filing separately, due to the increased number of credits and deductions that are available when filing jointly.
Finally, couples filing separately may also have to pay additional fees to their tax preparer, as filing separate returns can be more complicated than filing jointly, and therefore may require more work on the part of the tax preparer.
Tips for Couples Filing Single When Married
For couples who are considering filing single when married, there are a few tips that can help make the process go more smoothly.
• Talk to a financial advisor or tax preparer: Before making any decisions to file separately or jointly, couples should speak with a financial advisor or tax preparer who can help them understand the potential implications of each option.
• Research all your tax breaks: It can be helpful to research all of the available deductions, credits and other tax breaks that may be available to couples filing jointly and separately, and to compare the potential tax liabilities of each.
• Review past returns: It’s also a good idea to review past returns to get an idea of which filing status historically resulted in the lowest taxes.
• Keep track of deductions: Filing single when married can mean more paperwork, so couples should be sure to keep track of all deductions, credits and other tax breaks that are applicable to them.
Conclusion
Filing single when married can be a tricky decision, and one that should not be taken lightly. Couples should carefully consider the pros and cons of filing single when married, and consult a financial advisor or tax preparer to ensure that they are making the best decision for their particular circumstances. With the right information and preparation, couples can make an informed decision about which filing status is best for them.
I’m Kieran Walker, and I’m a Celebrity and Financial Expert. I live in Monaco, and I love helping people make the most of their money. Whether it’s through investments, or just making sure they’re getting the best deals on everything they buy, I want to help as many people as possible grow their wealth.
I’ve worked with some of the biggest names in the world when it comes to finance, and I’m always looking for new ways to help people save money. If there’s one thing I know, it’s that money can be a powerful tool – but only if you use it correctly.