Married Filing Jointly or Separately…The Choice is Yours

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If you are married, you generally have a choice of filing your federal income tax return(s) as married filing jointly (MFJ) or as married filing separately (MFS). Due to a number of special rules, your combined tax will often be lower if you file MFJ, then if you file MFS.

Basic rules

On a joint return, you and your spouse report your combined income, exemptions, deductions and credits. You are both responsible for any tax, interest, or penalty due on a joint return.

On a separate return, you each generally report only your own income, exemptions, deductions and credits. You each are responsible for any tax, interest or penalty due on your separate return.

Special rules for MFS:

Many tax items for MFS are exactly half of the amounts for MFJ, including the following:

  • Tax brackets (higher tax rates are reached at lower income levels for MFS than for MFJ)
  • Phase out threshold for personal exemptions
  • Limitation threshold for itemized deductions
  • Limits on the amount of income that can be excluded under an employer’s dependent care assistance program
  • Alternative minimum tax exemptions
  • Amount of capital losses you can deduct
  • Income levels at which the child tax credit is reduced
  • Income levels at which the retirement savings contributions credit is reduced
  • Income thresholds for the additional 0.9% Medicare tax on Social Security wages and self-employment income and the 3.8% Medicare tax on net investment income

Some items are not available for MFS:

  • Credit for child and dependent care expenses (in most cases)
  • Earned income credit
  • Exclusion or credit for adoption expenses (in most cases)
  • The American Opportunity credit and the Lifetime Learning credit
  • Deduction for student loan interest, and the deduction for tuition and fees
  • Exclusion for interest from qualified U.S. savings bonds used for higher education expenses

Other rules that apply to MFS:

  • With MFS, if your spouse itemizes deductions, you cannot claim the standard deduction, and even if you claim the standard deduction, the stand deduction for MFS is half the amount for MFJ
  • The thresholds for taxation of Social Security benefits are lower for MFS than for MFJ
  • The phase out thresholds for deductible contributions to a traditional IRA (if you were covered by an employer retirement plan) or for contributions to a Roth IRA start at $0 for MFS

New rules for same-sex marriages

In response to a 2013 Supreme Court decision invalidating a key provision of the Defense of Marriage Act, the IRS ruled that same-sex couples legally married in a jurisdiction that recognizes their marriage are treated as married for federal tax purposes, regardless of whether the jurisdiction the couple lives in recognizes same-sex marriages. However, the rule does not apply to registered domestic partnerships, civil unions, or similar formal relationships recognized under state law. As a result, legally married same-sex couples generally must file their 2013 (and future) federal income tax returns as MFJ or MFS.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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