Tax season is finally upon us, and as the W2s and 1099s flood mailboxes across the country, many married couples are still deciding whether they will file a joint tax return or file separately. Each option has its own set of advantages and disadvantages, including tax credit eligibility, convenience and more. Here is a look at some of the advantages married taxpayers filing a joint return will experience this tax season.
The Earned Income Tax Credit
The earned income credit (EIC) is one of many tax incentives married couples filing a joint tax return can take advantage of. This tax advantage is only available to married couples who file jointly and who meet certain financial requirements set by the IRS. Couples who are eligible for the Earned Income Tax Credit can receive a tax credit of $475 if they have no qualifying children, $3,169 if they have one qualifying child, $5,236 if they have two qualifying children, and $5,891 if they have three qualifying children. This is one credit married taxpayers do not want to miss.
Deductions for College Tuition
Another tax break married couples filing a joint return can claim are deductions for college tuition expenses. Married parents with a college-age student in their household will want to take advantage of a tax deduction for their child or children's college expenses during the calendar year. Parents of college students are allowed to deduct $4,000 in college expenses per year.
The American Opportunity and Lifetime Learning Tax Credit
Formerly known as the Hope Tax Credit, the American Opportunity and Lifetime Learning Tax Credit is available to married couples who file a joint tax return, and it helps them save money on college expenses. The American Opportunity and Lifetime Learning Tax Credit provides a 100% tax credit on the first $2,000 you spend on college tuition, with an added 25% off the next $2,000, granting a total tax credit of up to $2,500.
The Convenience of Completing Just One Return
Another big benefit for many married couples who file joint tax returns is the convenience of completing just one tax return. Because you are lumping your incomes, deductions and tax bills together, the return is calculated under the married filing jointly tax schedule, which can save couples money, depending on the amount of taxes you paid during the year, and how much your salary is.
Deductions for Adoption Expenses
Another benefit of married couples filing a joint tax return is that they can deduct adoption expenses. Adoptions can be very expensive, and by filing a joint tax return, eligible parents who have adopted a child in the calendar year can claim a nonrefundable tax credit of up to $12,650.
The Bottom Line
There are many tax credits and tax benefits available to married couples who file a joint tax return. The financial benefits of filing a joint return as opposed to filing separate returns are hard to resist for many. This list is just the tip of the iceberg. There are plenty of other advantages that married taxpayers can take advantage of when filing a joint tax return. Prior to filing your tax return, research which option would work best for you, and always check to see what the eligibility requirements are for the tax credits and deductions that you are interested in claiming.