The first thing to recognize is that the so-called "marriage penalty" no longer exists. Before 2001, the standard deduction for a married couple filing jointly was less than twice the amount of a single taxpayer. Today joint filers can claim exactly twice as much as single or separate filers, so that's not an issue. Here's what to consider instead [source: Vient]:
Advantages of filing jointly:
- Double deduction – The double-sized standard deduction is reason enough to file jointly, particularly in single-earner households.
- Certain tax credits – Only married couples filing jointly (not separately) can qualify for the earned income tax credit, the American opportunity tax credit, the lifetime learning credits, the child and dependent care credit, and deductions for adoption expenses.
- Higher limits – You don't have to file jointly to claim the child tax credit, but the $1,000 credit begins to phase out at $110,000 for joint filers and only $55,000 for separate filers.
Advantages of filing separately:
- Medical bills — The IRS allows you to deduct medical expenses in excess of 10 percent of your income. If your spouse makes a lot more money than you, then his or her income can make it difficult to deduct your medical bills.
- No liability — By filing jointly, both husband and wife are legally liable for mistakes or misinformation on the tax return. If one spouse has complicated taxes related to a business, it might be smart to let the other half off the hook.