During 2020, a lot happened, and you may have altered your wedding plans. Many had to reschedule their ceremony during the coronavirus restrictions. While others were able to assure that love conquered all and tie the knot before the year was over.
Depending on when you got married you may have not even been married for more than half of the year. This may cause you some confusion as what your tax filing status should be when preparing your 2020 tax return.
If you got married this year you may be wondering what your tax filing status should be; single, married filing jointly or separately?
I have only been married for the past 60 days, do I need to change my filing status?
Generally, the IRS considers your marital status based on the last day of the tax year. So, if you are legally married on the last day of the tax year (December 31st) then you must file either married filing jointly (MFJ) or married separately.
In order to use the single filing status, you need to be unmarried, legally separated, or divorced on the last day of the year.
When you file your tax return for the tax year in which you were married then you either select married filing jointly or married filing separately. So if you got married in 2020, and you file your 2020 tax return (typically in 2021) you need to select married filing jointly or married filing separately. This applies if you were legally married in the USA or in a foreign country.
What is the difference between married filing jointly and married filing separately?
The married filing jointly has many tax advantages. The IRS gives the largest standard deduction each year to couples that file married filing jointly at $24,800 in 2020. Now if you file married filing separately the deduction is limited to $12,400. There can be other downsides of filing separately like not being able to deduct student loan interest for example.
What tax advantages do married filing jointly couples get?
Namely, couples you file a joint return qualify for many tax credits including Earned Income Tax Credit (EITC), American Opportunity Tax Credit, Lifetime Learning Credit, and Child and Dependent Care Tax Credit.
Typically, joint filers qualify for larger income limits for certain taxes and deductions.
How do I know which status to decide to use?
Deciding whether to file jointly or separately will depend on you and your partner’s specific situation. You will need to consider several factors from medical expenses or your partner’s tax bill.
When preparing your return, our team of licensed professionals will determine which filing status is best for you based on your individual circumstance.
Contact our office to discuss having your 2020 tax return prepared.