Will jointly filing taxes have the effect of joining a couple's credit?

By Chizoba Morah AAA
A:

The only thing that "joins" the credit of a married couple is the ownership of joint accounts. In other words, if there is a credit card, line of credit, mortgage or loan in both names or one party is an authorized user on one of the other person's account, then the credit report agencies include this information on the credit reports of the husband and the wife. In the event that there is a default on any joint account, that information is also reported on both credit reports.

Filing a joint tax return does not link the credit of a married couple. It increases the eligibility and amount of certain credits. The only connection between a joint return and a couple's credit is if there are back taxes or child support owed, default on a loan or tax balance due. If a couple files jointly and one or both of them owes child support, back taxes and has a default against a loan, then the money owed is deducted from any refund due. If the tax return shows that instead of receiving a refund, the couple owes money, then the IRS holds both parties responsible. So, filing jointly does not have the effect of "joining" the credit of a couple. Rather, a joint tax filing can affect a joint tax return.

To learn more, check out The Importance Of Your Credit Rating.

This question was answered by Chizoba Morah.

RELATED FAQS

  1. What is the difference between the Five Cs of Credit and credit rating?

    Learn the difference between the five C's of credit and credit rating and how they are used together by banks and finance ...
  2. What is the difference between disposable income and discretionary income?

    Learn about disposable and discretionary income, including why these measures are important, the main difference between ...
  3. Why did Larry Page pay himself a salary of only $1 a year at Google?

    Learn possible reasons for Google co-founder Larry Page's continued acceptance of an annual salary of only $1 as chief executive ...
  4. Is the marginal tax rate a progressive tax?

    Learn how the marginal tax rate is a progressive tax that takes a higher percentage of income tax from high-income earners ...
RELATED TERMS
  1. Soft Inquiry

    A credit report check that does not affect an individual's credit ...
  2. Thin File

    A limited credit history which can make it difficult to get credit ...
  3. Adverse Credit History

    A track record of poor repayment history on one or more loans ...
  4. Charge-Off Rate (Credit Card)

    The percentage of consumers whose unpaid balances credit card ...
  5. Time-Barred Debt

    Money a consumer borrowed and didn’t repay but which is no longer ...
  6. Credit Mix

    The types of accounts that make up a consumer’s credit report. ...

You May Also Like

Related Articles
  1. Credit & Loans

    Meet The Company Behind Your FICO Score

  2. Investing

    Why did Larry Page pay himself a salary ...

  3. Stock Analysis

    What Makes LinnCo Different From MLPs?

  4. Stock Analysis

    Why Should Investors Read The Annual ...

  5. Credit & Loans

    Fight Scams: Check Credit Card Accounts ...

Trading Center