Married couples can file tax returns singly or jointly. Is there any reason why a married couple would choose to file jointly rather than singly? Are there benefits to filing jointly that couples filing singly cannot get? Assume a married couple both making solidly middle-class incomes at full time jobs in the mid thirties with no kids. Could such a couple expect to reap any benefits from filing their taxes jointly? If so, what specific benefits would they get? Thanks in advance.
Married couples can file jointly or separately, but “married filing separately” is very different than filing “singly”. You cannot file as single if you are married.
Married filing separately is almost always much worse than what you would get if you hypothetically filed as single. It’s usually worse than filing jointly, though there are some situations in which it is better. I think if one of the two has a lot of deductions and the other has a high income, filing separately may be better than filing jointly.
No they can’t. They can file Married-jointly or Married-separately. The tax burden for somone filing Married-separately is much higher than for a single person earning the same amount.
Yes - it almost always works out cheaper to file jointly than separately.
Yes - see a list in this article
A lot of the benefits do relate to kids or when spouses have disparate incomes, so there might not be much difference in this particular case. As an example of a disparate income, if one spouse earns $100k and the other $30k, then by filing separately the $30k earner would be saving his/her marginal rate on deductions and exemptions - probably 15%. With a joint income of $130k, all deductions and exemptions would save tax at 25%
If you go to a professional tax preparer, they should have software that will do a calculation to show whether MFS (married filing separately) is better than MFJ (married filing jointly) for any particular case. It’s virtually impossible to predict ahead of time, but almost everyone comes out slightly better filing MFJ. I think some of the consumer-level packages like TurboTax will also do the MFS/MFJ comparison, but I’m not positive.
In all my years of preparing tax returns, I’ve only seen one where they came out better MFS… but that one case was a lot like the one you describe.
The main reasons people choose MFS have to do with liability and divorce/prenuptial issues. (PS: Any lawyer who drafts a pre-nup requiring MFS filings should be fired and then shot.) If you file MFJ, then each spouse is responsible for paying the entire tax. If you file MFS, you’re only responsible for the amount calculated on your return.
This can be a very good idea, regardless of cost, in the year before filing for divorce, since the IRS is going to collect from whomever they can and they don’t care what the divorce decree says about who should pay what.
Filing MFS is also a good idea if your spouse is self-employed and you know they’re cheating on their books, or not keeping the records that would be required to back up their expenses. If the IRS audits an MFJ return, they don’t care that the adjustment is all due to one spouse’s business - again, they will collect from whomever they can. Since the IRS can go back 3 years (6 if income is understated enough; forever if there’s fraud), this can really come back to haunt you years after you think you finally got rid of your tax-evading spouse.
Under some situations, a married person with dependents can file as head of household - they are effectively “considered unmarried for tax purposes.” This occurs if you have a legal separation, or don’t but lived separately for the past 6 months. Assuming that your relationship is otherwise intact, MFJ or MFS is the way to go.
Sometimes people talk about the “marriage penalty,” but this almost always refers to the difference between MFJ and single/HoH/Qualified widow(er), and not the difference between MFJ and MFS. MFS is the worst possible filing status for 99% of people. You miss out on many credits as MFS, and you MUST itemize if your spouse itemizes.
dracoi, it may be better to file as an “innocent spouse” in some situations, which can protect you from their misdoings. If you live in a separate or community property state may also affect your results.
In addition to the benefits listed by the article amarone cites, we’ve also found that filing jointly gives you a MUCH higher income limit for IRA eligibility. Your solidly-middle-class couple would be able to contribute to a Roth IRA filing jointly but not separately.
Also, you only have to prepare one tax return, which as far as I’m concerned is by itself a compelling argument to filing jointly 
To clarify: All the responses so far deal with filing at the US Federal level. State-level returns may be very different and in fact often are much the same filing jointly vs. separately. In my state (Virginia), jointly-held accounts can have their income assigned to either partner, in whatever proportions they choose - which might be sufficient to bump one partner into a lower tax bracket, for example.
Agreed that married-filing-separately is rarely beneficial at the Federal level. We had one year where that worked out - the first year income limits were implemented to phase out the deductibility of IRA contributions. I had a 401(k) at my job, and my income was high enough that my IRA wasn’t deductible. My husband, being in grad school, had little enough income and no pension plan, so he was able to deduct an IRA.
Innocent spouse is good for making sure you get your refunds from your share of withholdings or credits… but if the IRS is actively pursuing collections on a return you filed MFJ, it won’t help you with that.