May 1, 2015

So you’re newly married and looking for general tax info, but you’re not sure of how to start. Look no further. We’ve prepared a beginner’s guide for filing tax returns for married couples.

Married couples may file either jointly or separately. Advantages and disadvantages vary for each filing status according to your joint debt load, your income and other factors.  Most married couples benefit financially by filing jointly These benefits include the following:

  • The unemployed spouse can have a fully-funded, tax free traditional Individual Retirement Account
  • A legally recognized marriage can protect the estate
  • Married couples are entitled to higher charitable contribution deductions.

In addition, there are several drawbacks to married couples filing separately, including:

  • The Alternative Minimum Tax exemption for married couples filing separately is half the amount allowed for married couples filing jointly.
  • Adoption credits and exclusions are usually not allowed.
  • The capital loss deduction limit is $1,500 for married couples filing separately, versus  $3,000 for married couples filing jointly.

Married couples living in community property states must divide expenses for state taxes. Mandatory community property states are  Arizona, California, Idaho, Louisiana, Nevada, Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state.

Tax filing requirements vary for same-sex married couples. They may file joint federal tax returns due to the defeat of the Defense of Marriage Act. However, they may or may not be entitled to file joint state tax returns. Joint returns are allowed in states that recognize same-sex marriage. For same sex married couples who live in states that do not recognize their marriages as legal, states may require one of three possible scenarios:

  • File separate returns by allocating income according to a schedule.
  • Complete pro forma federal returns and use that information.
  • Allocate income based on a ratio.(Alabama only)

If you are unsure of what to do, test the waters by enlisting the aid of a tax professional.