Filing married is only beneficial when one of two spouses makes less than the standard deduction for an individual filing single, which is $12,000. Every dollar under $12,000 for the individual making less, will be added to their spouses deduction reducing his/her income.
For example, you make $100,000 and your significant other makes $5,000. You’ll both receive a standard deduction of $12,000. You’ll use all of yours ($100,000 – $12,000 = $88,000 taxable income) but your significant other will only use $5,000 and lose the remaining $7,000 as they do not have enough income to write it off ($12,000 – $5,000 = $7,000 unused standard deduction) which could have been used by you had you filed together.
The comparisons below illustrate how filing separate or married does not change the total tax owed when both individuals make above $12,000.
|Comparison 1: Filing separate and married making the same income|
|Two individuals making $100,000 filing separate = $100,000 – $12,000 (standard deduction) = $88,000 run it through the tax bracket and separately each would owe $15,410 x 2 = $30,820.|
|Two individuals making $100,000 each filing married = $200,000 – $24,000 (standard deduction) = $176,000 run it through the tax bracket and together they owe $30,820.|
|Comparison 2: Filing separate and married, one Individual make less than the other|
|Two individuals, one making $100,000, and the other making $50,000 filing separate = $50,000 – $12,000 (standard deduction) = $38,000 run it through the tax table and they’d owe $4,369 + the $15,410 tax from the higher income earner and together they would owe $19,779.|
|Two individuals, one making $100,000, one making $50,000 filling together = $150,000 – $24,000 (standard deduction) = $126,000 run it through the tax table and they’d owe $19,779.|
Sunpath Financial, Inc. and its associates are not tax experts or advisors and will not be held liable for any information pertaining to the content of this article. This is information based on independent research.