Think About Your Tax-Filing Status

With tax deadlines looming, you and your spouse may have to answer the question, “Should we file together or separately?” Many tax professionals have differing opinions about the subject, so it probably helps to have a base of understanding before requesting tax preparation services in DeSoto, TX.

Start with Tax Brackets

One of the biggest factors affecting your decision will be tax brackets. Depending on the income level of the filer (or filers), the tax rate will change. Put simply, how much you make determines how much taxes you pay. A single person with an income of $40,000 will have a tax bill that is different from a married couple making the same amount.

At the same time, married couples filing jointly have tax brackets different from singles and couples filing separately. Talking with your spouse about what your tax brackets might be as individuals might allow both of you to enjoy more savings compared to filing together.

Consider Credits

Another thing you will want to consider is qualifying tax credits--items that can reduce a tax bill. Some credits are only available to individuals who file separately from their spouses. For instance, if your partner can declare medical expenses such as COBRA payments, they may qualify for a bigger deduction. It is worth noting that the Child Tax Credit is also available to spouses filing separately.

Choosing which tax-filing status can be challenging--especially if you are married. However, by working with a tax preparer and going over your options, you have the potential to lower your overall tax bill. Certified Public Accountants can provide the tax preparation services you need to keep your taxes on track.