It’s my annual “Taxes from A to Z” series! For the series, I’ll focus on terms that you might see on your tax forms and statements but not necessarily in the headlines. If you’re wondering whether you can claim wardrobe expenses or whether to deduct a capital loss, this is one series you won’t want to miss.
J is for Joint Return.
A married couple may opt to file a joint return (sometimes called “Married Filing Jointly” or “MFJ”) or each can choose to file two separate tax returns (as “Married Filing Separate” or “MFS”). The joint return is the most popular of the two options because it tends to provide a more favorable tax result.
In order to file a joint return, you must be legally married as of the last day of the year. It doesn’t matter whether you get married or divorced during the year: the day that matters is the last day of the year.
For more on filing status, click here.
A joint return reports income for both taxpayers, as well as corresponding deductions and credits. That generally results in a lower tax bill than if each individual taxpayer had reported separately. However, the liability from a joint tax bill is considered joint and several. What that means is that both taxpayers are responsible for the tax, as well as any penalty and interest – even if the relationship later ends in divorce. Typically, that liability is not easily separated (though exceptions apply in very specific circumstances).
One final word: a joint return is not a properly filed return unless it has two signatures.
