Many newlyweds and seasoned couples ask what filing status should they file on there tax return. I often go through a series of questions to better understand there financial situation and future goals.
For example a younger couple I may ask do you have student loan debt. We know that if you file MFJ (married filing jointly) then Sallie Mae will take into consideration both incomes and you could be paying a higher monthly payment.
For an older couple, I may ask do you have outstanding debt like child support or other debt that could relinquish any refunds you may be entitled too. For better or for worse when filing MFJ.
Below are Pros and Cons to both filing status:
It’s never a one size fits all, but for the majority of my clients, it is important for me to run there taxes both ways to see the outcome.
For the most part all that matters is which filing status will bring a higher refund or less tax liability to our home. That is why I make it a habit to run it both ways for each unique couple. The good news is you can change your filing status interchangeably when married. One year it may be beneficial to file MFJ, and the very next year it may be beneficial to file MFS. Do not use this article as a bible as you should always discuss with a professional first. If your my client this is not new to you!