What Does It Mean to File Taxes Jointly?
One of the five official tax filing statuses is “Married Filing Jointly.” Qualifying Widow(er), Head of Household, Single, and Married Filing Separately are the others. Only the Married Filing Jointly status allows two people to be identified as tax filers on the same return.
Who is eligible to file joint federal tax returns?
Only in particular circumstances can you and your spouse submit a joint tax return. “Married tax payers” are defined by the IRS as two people who match one of the following criteria:
Is it possible to get a tax credit for filing jointly?
There are no unique tax incentives available for married couples filing jointly. However, because two people are filing, the IRS allows married couples to take advantage of higher deductions and credits.
Single filers, for example, have a standard deduction of $12,550 for 2021 tax returns. Even if only one of them works and has an income, married couples filing jointly can benefit from a standard deduction of $25,100.
Some tax credits that you can’t earn if you’re married and file separately may be available if you’re married and file jointly. Education credits, the child and dependent care credit, and others are among them.
Other Possible Advantages of Filing Jointly
Another advantage of filing jointly is that you may qualify for higher income thresholds. If you earn more than $164,925 in taxable income per year, you’ll be in the 32 percent tax bracket. To be in that tax bracket as a married couple filing jointly, you must earn more than $329,850 in taxable income. That’s true even if only one of you works and earns money, so one of you could earn a lot of money while the rest of you stay in a lower tax bracket.
What Effect Does Filing Jointly Have on Your Credit Score?
Because taxes have no direct impact on your credit score, filing jointly will have no impact as well. Only if you don’t pay what you owe and get into trouble with the IRS will taxes have an impact on your credit score. In that instance, they have no bearing on your final score. However, you may need to borrow money, skip payments, or make financial decisions that allow you to cover your taxes at the risk of your credit score.