They’re Married All Year – to the IRS

From the Boston Herald’s TaxSmart advice column:

I got married toward the end of 2012. My wife and I had already bought a house together the previous year. We don’t have children.

Since we were only married for a short time in 2012, I’m confused as to how we should file.  Am I single or married? Sort of married? Not quite single? Do I have to file differently for the different time periods? It all seems problematic.

-Mark Irving


I have good news.  The answer to your complicated question is actually very simple.

Your filing status for the entire year is whatever your marital status is on the last day of the year.  For example,  if you get married on Dec. 31st at 11:59 p.m., you are considered married, for tax purposes, for the entire year.  Generally, “Married Filing Joint” is the more favorable status as opposed to “Married Filing Separately.”  The tax rates for married filing jointly are much more favorable, especially in the higher tax brackets.  Married taxpayers filing separately reach the 28 percent, 33 percent and 35 percent tax brackets much sooner than married taxpayers filing jointly.

Certain deductions and tax credits are not available to taxpayers who elect to file separately, including student loan interest deductions, college tuition deductions, the American Opportunity Education Tax Credit of up to $2,500, the Child and Dependent Care Credit and the Earned Income Tax Credit.

Additionally, taxpayers filing jointly can deduct capital losses up to $3,000 per year, compared to $1,500 if filing separately.  If you are not sure which status to file, run the numbers both ways.   Most tax preparation software programs have the capability to calculate which status will result in lower taxes.  Chances are you will end up filing “Married Joint.”

-Robert S. Fineman, CPA