Depending on your filing status, there are a number of possibilities when it comes to your tax benefits (or costs). Whether you choose to file jointly or separately can make a difference in your tax bill. And, of course, there might be a penalty in some cases, even if you choose to file jointly.

According to the Tax Policy Center, you end up with a “marriage penalty” when you pay more in taxes than you would have ended up paying if you filed separately. However, if your joint filing status means that you pay less than you would individually, you get a marriage “bonus.”

In order to help you figure out whether you are paying a penalty or receiving a bonus, the Tax Policy Center has released a calculator helping you determine where you stand.

How Filing Jointly Can Help Your Tax Bill

After filling in the information related to our tax information, the calculator showed me that my husband and I have a marriage “bonus” of $530. If we added up our separate tax bills, the total would be more than what we pay now as a married couple.

The only issue I had with the calculator is that all of the deductions were supposed to be divided, as well as dependents. Since we only have one child, who do you divide that up? I divided up our deductions evenly, although I suspect that if it really came down to filing our taxes separately, there would be some sort of percentage involved as to assigning the amounts of the deductions.

I suspect that a large portion of our “bonus” comes from the fact that we have a large disparity in income. I’m the primary breadwinner in our household, and my income is much higher than my husband’s. If we were to file separately, I would be in a higher tax bracket than the two of us are in jointly. And that would mean a higher tax bill for me.

Overall, for our household, it means that it makes sense to file jointly — especially since we share everything else about our finances, including the bank accounts.

Does It Ever Make Sense to File Separately?

There are some cases in which it makes sense to file your taxes separately. In the case of financial reasons to file separately, it usually only makes sense when one person has expensive costs related to deductions based on AGI. For instance, you can only deduct medical expenses to the extent that they exceed 10% (new provision of health care reform) of your AGI. If your partner has high medical bills, your combined income might be high enough that you can’t take advantage of that deduction, while filing separately might allow this deduction.

Other miscellaneous deductions, like job hunting expenses, come with a 2% threshold.

These circumstances are rather few and far between. In general, the main reason to file separately is if you think that your spouse is committing tax fraud. If this is the case, filing separately can keep you from getting caught up in legal and liability problems.

Another reason some spouses file separately is reporting requirements as public figures. If you want to keep your tax records confidential, but your spouse is running for office, filing separately can help you avoid some of the scrutiny. It also makes sense to file separately if you are separated from your spouse, awaiting a divorce.

Run the numbers, and consider likely scenarios, and then decide what filing status works best for your situation.



Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.