Introduction

There’s no question that taxes are one of the most complex and confusing parts of life. They are also a fact of life for everyone who earns money, but they can be especially tricky for married couples. You may have heard that each spouse in a marriage pays taxes separately – true enough – but there are ways to plan your finances so that you end up paying less tax overall than if you didn’t consider these strategies. In this article, we offer tips on filing jointly as a married couple and reducing your overall tax burden.

Filing status

• Filing status defines how you will file your taxes. There are five filing statuses: single, married filing jointly, married filing separately (with or without dependents), head of household, and qualifying widow(er) with dependent child.
• Your choice of filing status can significantly impact your tax liability because it determines which income brackets apply to you and how much in taxes you owe for each bracket.* Your marital status also affects the allowable deductions available to claim on IRS Form 1040.* When calculating our taxes for the 2016 tax year, my husband and I reduced our taxable income by more than $1 million by changing from “married filing separately” to “married filing jointly.”

Marriage penalty

You may have heard of the “marriage penalty,” but you might not be sure what it means. The marriage penalty is a term used to describe how married couples can end up paying more taxes than they would have if they had remained single.

The reason for this situation is simple: In the United States, there are two distinct tax brackets for individuals–10% and 15%. For married couples filing jointly (MCFs), however, there are four different brackets–10%, 15%, 25%, 28%. When one spouse makes significantly more money than the other and has an income that puts them in a higher tax bracket than their partner does, this creates what’s known as an MCF tax bracket mismatch or “income gap.”

For example, Say John makes $50k per year while Jane makes $30k per year; since John’s salary puts him just outside of his 15% bracket while Jane falls within hers, their combined income will fall into one of three categories according to IRS guidelines: 10%-15%; 15%-25%; 25%-28%. Suppose both spouses earn similar amounts from similar jobs with comparable qualifications (or lack thereof). In that case, chances are good that they’ll pay more overall due to these differences between individual versus joint filers’ brackets–which could mean thousands upon thousands over time!

Tax credits and deductions

Tax credits and deductions are similar in reducing your tax liability. However, there are some key differences between them.

Tax credits: A credit reduces the taxes you owe, dollar for dollar. For example, if you have an $800 tax credit and owe $1,000 in taxes, then the credit covers all of your liability, and no further action is required from you (in this case).

The benefits of tax credits include:

• They can be quite valuable since many people don’t pay enough to cover their full liability for any given year (especially those who don’t make much income). This means that even if a taxpayer has no other deductions available or other ways to reduce their taxable income below what was earned during the 2018/19 financial year period, then they may still qualify for one or more federal credits, which could result in getting some money back instead having it taken away completely!

Spousal income

You may want to report your spouse’s income when you file your taxes. This is called spousal income and can be reported on Form 1040 or Form 1040A.

Spouses who do not work outside the home have two options for reporting their spouse’s wages:

• They can enter the income as “Wages, salaries, tips, and other compensation” on Line 7 of Form 1040 or Line 1a of Form 1040A.
• They could also choose to use IRS Pub 525 Tax Withholding and Estimated Tax Payments For 2018, which states: “Online 2b (Form 1040), find “Wages” under column A; include any amounts shown as wages on line 7c of your form(s) W-2.”

Itemized deductions

Itemized deductions are the expenses you can deduct from your income when filing your taxes. They’re reported on Schedule A of Form 1040, including medical expenses, mortgage interest (up to a certain amount), charitable donations, and state and local taxes.

You need to determine whether it’s better for you to itemize or claim the standard deduction. If your itemized deductions exceed the amount of money that would be saved by taking advantage of the standard deduction, then it makes sense for you to itemize instead of claiming what’s automatically given by default when filing as single or head-of-household status.*

Standard deduction

The standard deduction is a flat amount you can deduct from your taxable income if you don’t itemize your deductions. For example, if you’re single and earned $50,000 in 2018, your standard deduction would be $12,000 (the current amount). If this were all of the money coming into your household for the year, then taking the standard deduction would save you around $2,600 in taxes compared with claiming all of these expenses itemized on Schedule A.

The benefits of taking the standard deduction are clear: it’s simpler than itemizing. It saves time spent preparing tax returns–especially if many items are involved in an audit or review by an accountant or tax preparer.

There are some drawbacks, though, most notably that not everyone qualifies for one! Some conditions must be met before being eligible for this benefit; they include being at least 65 years old at any point during tax year 2018; blind as defined under IRS rules; claimed as dependent by another person who was required by law to provide support (such as parents); earned less than $12K from wages/salaries/tips combined with other types income such as interest/dividends/alimony payments etc.; owed no federal taxes after credits were applied against them due to having too much withheld throughout 2019 due mainly because their withholdings didn’t match up perfectly against actual earnings throughout 2018 when filing returns later next year…

Retirement savings

In addition to the tax benefits of being married, you may also be able to save for retirement more easily by pooling your resources. If one spouse earns more than the other, that person can contribute up to $18,500 per year (in 2019) into a 401(k) plan or IRA while their partner contributes up to $6,000 (or $7,000 if age 50 or older). The couple can then invest those funds together in one account.

The Internal Revenue Service also allows married couples who file jointly as business owners or self-employed individuals–who might otherwise have trouble contributing enough money toward retirement through traditional means–to set up a Simplified Employee Pension Plan (SEP). This type of account allows individuals with fewer than 100 employees (including themselves) who earn less than $56,000 annually ($62K if age 50+) to take advantage of tax breaks for saving for their golden years without having to worry about whether their company has enough money saved up from its profits each year.

Healthcare expenses

If you and your spouse have high-deductible health plans, the IRS allows you to deduct qualified medical expenses by using the 7.5% of AGI floor instead of 10%. This can save between $250 and $1,000 in taxes for married couples filing jointly.

You can also deduct any amount paid for diagnosis, cure, mitigation, treatment, or prevention of disease; for surgeries performed to correct a deformity affecting your body structure; for hospitalization (including meals and lodging); nursing services; physical therapy fees; prescription drugs that you take at home; dental care including X-rays (but not cosmetic surgery) and eyeglasses; medical equipment such as wheelchairs used by those with disabilities–and even ambulance service if it’s medically necessary!

Remember that many common health care expenses aren’t deductible: cosmetic surgery isn’t deductible (even if it prevents future illness), nor are elective procedures like liposuction or tummy tucks!

Estate planning

For married couples, estate planning is important. While your assets are protected from creditors and divorce proceedings, they’re not necessarily safe in the event of your death. An estate plan can help ensure that the assets you leave behind go to those who need them most while avoiding probate court and potential tax liabilities.

Estate planning can be complicated; it’s best to work with a tax professional when preparing an estate plan because he or she will know what paperwork needs to be filed for each situation that arises during your lifetime (and after death). If possible, try to set up an irrevocable trust before any major life events occur–like marriage or children–so that there are no surprises down the line when it comes time for the distribution of assets among beneficiaries.

Tax law changes

Tax law changes are frequent and can greatly impact your taxes. In 2018, the Tax Cuts and Jobs Act (TCJA) made major changes to the federal income tax system. These changes have been in effect from January 1, 2018, through December 31, 2025, at which point they will expire unless Congress extends them or makes further modifications to them via another legislative action.

As a result of this legislation, many taxpayers may face higher or lower tax bills than they would have otherwise paid under prior law because of adjustments made to their income brackets and other tax items such as deductions and exemptions. Even if you do not feel any immediate effects from these changes due to an increase or decrease in your overall income compared with last year’s earnings–or if your overall level remains unchanged–you should still consider whether any adjustments need to be made now so that you can take full advantage of what might be available later on down the road when planning for future years comes around again next year!

Tax Professional

If you’re married, it’s important to have a tax professional on your team. Your tax professional has the experience and knowledge to help you avoid mistakes and save money. They can also be helpful in planning for the future and estate planning.

This article offers tips that you can use to plan for your taxes.

Tax planning is important for everyone.

It’s especially important for those who are married, as the tax rules for married couples are different than those for single people. When you prepare your taxes each year, it’s important to consider how you can make the most of your money and save money on taxes. This can be done by maximizing deductions and credits to reduce your taxable income as much as possible.

Conclusion

The tax code can be difficult to navigate, but it doesn’t have to be. With the right information and strategies in place, you can ensure that your taxes are filed correctly and on time every year.