How to Save on Taxes as a Married Couple Filing Jointly
June 19, 2023For married couples filing their taxes jointly, there are a few key ways to save. By understanding the tax system and taking advantage of deductions and credits, you can minimize your tax liability. Keep in mind that tax laws change every year, so it’s important to stay up to date on the latest rules. With careful planning, you can maximize your tax savings as a married couple.
How to Save on Taxes as a Married Couple Filing Jointly in 2023
With the threat of a federal tax hike and rising gas prices, Couples filing jointly might want to consider rethinking their tax strategy for 2023 While the tax rates remain the same, some couples might benefit from filing separately.
Congress and the president have agreed to keep the tax brackets intact for 2023, meaning your tax rate will remain at 10%, 12%, 22%, 24%, 32%, 35% or 37%. But there are a few things couples can do to save depending on their tax situation.
If you’re itemizing deductions, make sure to hit your numbers and don’t forget any expenses!
What Are the Tax Brackets for Married Couples Filing Jointly?
Learn how to easily calculate your tax bracket and avoid Common Tax Trap Number 1 You’re Not Tax-Efficient, but Your Partner Is.
In 2017, the threshold for the head of household filing jointly was $250,000 ($100,000 for the spouse). That figure increased to $200,000 ($100,000 for the spouse) in 2018. For 2020, the figure rises to $250,000 ($125,000 for the spouse).
The tax brackets for single taxpayers and married couples filing separately are as follows:
- Single filers
- Married couples filing jointly
- Married couples filing separately
- Head of household
The figures are the same for 2021, meaning the tax brackets are 10%, 12%, 22%, 24%, 32%, and 35%.
How Can You Save on Taxes as a Married Couple Filing Jointly?
Couples who file together may savings! , Understanding the married filing jointly tax filing status can help you plan your finances. Here are a few ways you can save as a married couple:
Use married filing jointly status to maximize Earned Income Credit.
The earned income credit (EIC or EITC for short) is a refundable tax credit for low- to moderate The Saver’s Credit helps low- and middle-income workers and their spouses or dependents.
As a couple, you can earn up to $25,000 of an additional credit (over and above the flat amount available to single taxpayers) by combining your income. The additional credit is calculated as half of the value of your combined taxable income, up to a limit based on your filing status.
Filing married jointly means you can claim half of the earned income credit (EIC) for your entire taxable income. Since the credit is based on your taxable income, and not your total income, this means you can save on taxes by earning less overall.
Invest in a married filing jointly account to reduce your tax liability.
What Are the Benefits of Filing Jointly as a Married Couple?
When you file together, you not only get more tax savings than filing separately, but you also avoid the trouble of dealing with two separate tax accounts. By combining your financial records in one joint account, you can:
– Maintain a single, integrated tax portfolio
– Invest in a way that will minimize your tax liability
– Ratchet up the value of your assets
By filing separately, you’re essentially making two initial distributions from your single portfolio. Since married couples typically file together, the initial distribution is usually invested in separate accounts. Filing jointly status. Both of these steps can help you build wealth and stay on track to meet your long-term financial goals.
What if your employer offerings are different?
If your employer offers a married filing jointly plan but you and your spouse have different eligibility requirements for participation, You may be able to switch to a plan that better fits your earnings and savings.
How to save on taxes as a married couple filing jointly can be a challenging task, but with a bit of planning and understanding of the system, couples can maximize their tax savings. While the tax brackets and rules may stay the same for 2023, couples may want to consider filing separately if their taxable income falls outside of the standard tax brackets. Additionally, by having one financial record, couples can reduce the amount of paperwork and stress related to tax filing.
