Tax Tip #235

A common question from recently married couples: Should we file jointly? 

From a tax perspective, filing joint tax returns generally results in the lowest tax bill for married couples, but when could it make sense to file separately?

One example would be when one spouse has large medical expenses. Medical expenses are deductible only to the extent that they exceed 7.5 percent of adjusted gross income (AGI). If one spouse has significantly lower AGI when filing separately, it may increase the deduction.

There may be reasons filing separately is better even if the tax cost is higher, such as if one spouse has an income-sensitive repayment plan for student loans.

Which is more advantageous for your situation? Contact a team member to find out.