Selecting a status is not always as simple as checking a box to say whether or not you are married. You might be single, or married filing jointly, or married filing separately, a head of household, or a qualifying widow(er). Occasionally, a taxpayer can technically qualify for more than one status. That’s not usually the case when it comes to filing married versus filing single.
What’s the Difference Between Filing Single and Filing Married?
Single Filers
If you were never married, you’re most likely a single filer unless you can qualify as head of household. In no case, however, can you file as married or as a widow or widower. You’re also considered single if your divorce is final as of the last day of the year, or if you’re legally separated from your spouse under a court order.
Married Filers
Simply moving into separate residences won’t change your marital status with the IRS. This would be an informal separation and the tax code says you’re still married. It can’t be a temporary court order, either, one that simply governs the situation until your divorce is finalized. In all other circumstances, the IRS views you as a married taxpayer. A slim exception exists under the head of household rules if you haven’t lived with your spouse at any point during the last six months of the year, but you must meet some additional rules to qualify. Otherwise, your choice is limited to filing a joint married return or a separate married return. The tax code treats you as a single filer in several ways if you file a separate return, but with some penalties. You’ll be prohibited from claiming a variety of tax credits and deductions.
Tax Liability for Married Filers
You and your spouse are each “jointly and severally liable” for any taxes or penalties that come due on a joint married return, and you’re also responsible for any errors or omissions on the return. If your spouse owes money to a government entity on a debt that you’re not also liable for paying, you could lose your share of any resulting tax refund if it’s intercepted. The IRS does allow you to try to make a case that you weren’t personally aware of errors or omissions, however, and you can also make a claim for your share of the refund if you weren’t responsible for the debt in question.
Tax Brackets for Single Filers and Married Filers
You might actually find yourself in a lower tax bracket overall by filing jointly if you’re married. However, high-earning tax filers or tax filers with very disparate incomes might end up owing more money when they’re married, due to the marriage penalty. If you and your spouse make a similar amount of money, you’re likely to save. This difference in brackets and rates can also be beneficial when one spouse is self-employed and has business losses. Those losses effectively subtract from the other spouse’s earnings when they file a joint return. Brackets break down like this for the 2022 and 2023 tax years: Single filers earning $130,000 in tax year 2023 can reduce their taxable incomes to $116,150 if they only take the standard deduction. But joint filers earning $130,000 collectively can reduce their taxable incomes to $102,300. This would be the case even if Spouse A earned the entire $130,000, and Spouse B earned nothing at all. They still get to take the full deduction.
Credits, Thresholds, and Exemptions
Tax credits, itemized deductions, and more can be affected by your marital status. For example, single filers can deduct up to $3,000 in capital losses per year against taxable income, but this amount doesn’t double for married filers. They’re still limited to $3,000 jointly, or $1,500 each. Some deductions might become more generous for single filers under certain circumstances. If a single taxpayer earning $130,000 had a lot of un-reimbursed medical expenses, they could claim an itemized deduction for any amount over 7.5% of adjusted gross income (AGI). This threshold would double if they were married to someone who also earned $130,000 in income and filed jointly. This kind of increase could quite possibly put healthcare deductions out of reach for some filers. Charitable contribution deductions are limited to no more than 60% of your AGI if you donate cash. The limit drops to 30% for other types of donations. This limit is obviously more generous when you’re married filing jointly. You could effectively double your tax deduction.
A Note on W-4 Withholdings
Your filing status isn’t just an issue at tax time. It’s critical all year, particularly if you marry or divorce in mid-year. If you’re employed rather than self-employed, you were asked to fill out Form W-4 for your employer when you began employment. If you’re married and filing jointly, you may want to adjust your withholding to have more or less tax withheld using this form. Form W-4 lets your employer know how much income tax they should withhold from your paycheck. If you withhold more tax than you’ll ultimately owe—because your W-4 says you’re single, not married—more of your paycheck will be withheld. You’ll get that money back as a tax refund, but you’d effectively be using the IRS as an interest-free saving account all year. There’s little you can do about this dilemma if you’re divorced or married on December 31 because the year is over.
The Bottom Line
The choice of whether to file single or married is usually straightforward and made for you by the definitions in the tax code. If you’re married, you may need to decide whether to file jointly with your spouse or as two individual taxpayers. However you decide to file, your income will be taxed based on the bracket it falls into, which is affected by your filing status. If you have an unusual tax scenario, such as a year of high medical bills, or massive charitable donations, you may want to evaluate your options to determine how different filing statuses will affect the amount of taxes you owe. Be mindful of your status throughout the year, and keep up with changes on your tax forms so that you’re ready and organized when it’s time to file.
