The conventional wisdom says that married couples should file jointly to maximize tax savings. Sometimes though, married couples who file separately can save money on their taxes.
It all depends on your unique personal financial situation, said Lisa Greene-Lewis, a certified public accountant and tax specialist at TurboTax.
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“In general, married couples should file their taxes jointly, as you’ll file a lower tax rate and gain some tax breaks in the process,” Greene-Lewis tells TheStreet host Gregg Greenberg in this special video series. “For example, by filing jointly, you get a bigger deduction, at $24,400, compared to $12,200 when filing separately.”
Still, there are good reasons for married couples to file their taxes separately.
“If each spouse earns a big six-figure annual income, it makes sense to file their taxes separately,” Greene-Lewis said. “In general, you’ll gain the best tax savings deal that way.”
Another reason for married couples to file separately is if one spouse is self-employed. “The other spouse may not want to have extra tax debt from a self-employed business,” said Greene-Lewis.
Deductions are another good reason to file taxes on your own. “There are tax deductions that you may not get even though you're married,” Greene-Lewis added. “For example, if you or your spouse is attending college, you can't get the tax credit for education expenses, because you have to be filing separately to get that deduction.”
Another reason for filing separately is if a married couple is going through divorce. “In that scenario, it may be beneficial to file separately, especially if the communication between the two spouses is a problem,” Greene-Lewis said. “In that situation, each spouse can sign their own tax return and be responsible for what's on that tax return.”
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