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I was hoping to get some help as to what I should file on my taxes (single, married or head of household).

I recently got married in August.

I honestly and not sure the benefits of filing single/married/hoh.

Some info: My income: $74,000 Wife: $20,000

We have two dependents (kids).

What option should I file as? Why would you choose this option? Let me know if you need any more information.

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Since you are married as of December 31, you cannot file as Single. You can choose to file as Married Filing Jointly or Married Filing Separately. (You can only file as Head of Household in the rare case where you have been living apart from your spouse for the last 6 months of the year and you have a dependent.)

The way the tax rates are structured, filing as Married Filing Jointly (MFJ) is almost always better than Married Filing Separately (MFS), especially when the two people's incomes are very different. This is because when filing as MFJ, you will basically be taxed on the "average" of the two people's incomes (since the brackets for MFJ are twice the corresponding brackets for MFS), and the tax brackets are progressive, meaning a higher income is taxed at higher rates, so the average is always better or the same compared to the two incomes separately. There are also many other disadvantages for MFS, e.g. the income limits for Traditional IRA deduction and Roth IRA contribution are almost 0.

The only case where MFS might be better than MFJ is if one spouse's lower income qualifies them for some itemized deduction or tax credit that the combined income level in MFJ does not qualify for, and the benefit of this additional deduction exceeds the disadvantage in tax rates.

  • Thanks for the helpful answer! Would my best bet try both options in TurboTax and see which outputs a higher return? – Paul Dec 22 '18 at 17:05
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    +1 In fact, the tax rates are designed to steer married couples towards filing MFJ instead of MFS. Married couples filing MFS are often on the cusp of divorce or separation, or one spouse does not trust the other to report all his/her income correctly on a joint return and has no desire to perjure her/his self by signing a joint return. Furthermore, if a joint return is questioned and one spouse "has take me money and run Venezuela", the other spouse Is on the hook for all the taxes due. Trying both options in TurboTax to see which option produces the larger refund will validate this. – Dilip Sarwate Dec 22 '18 at 17:18
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    @Paul: I believe tax software usually already try all possible filing statuses for you and pick for you the best one by default. – user102008 Dec 23 '18 at 1:16

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