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With Valentine’s Day upon us, a lot of couples probably will end up engaged on Saturday, Feb. 14.
Congratulations! Here’s my unsolicited pre-wedding gift to all these couples. Include taxes planning in your matrimonial planning.
Longtime readers know I’ve posted about couples’ tax considerations many times over the years. On the eve of the most romantic holiday this year, I’m focusing on filing status, and why the wisest move for most married couples is file one combined tax return.
Married couples’ filing choices: Once you say “I do” your tax filing choices change. You must file your annual Form 1040 as married filing jointly or married filing separately.
This filing status requirement is effective for the full tax year you were legally wed, even if you exchanged vows on Dec. 31.
There are some circumstances when filing separately is a smart tax move for couples. But in most cases, filing a joint tax return usually is the best choice.
Here are six reasons why.
1. Wider tax brackets: Jointly filing married couples often benefit from wider tax brackets in that filing status category. This usually means more of their combined income may be taxed at lower rates than that for separately filing wedded couples.
And that means that one jointly filed tax return could provide a couple a bigger tax refund or lower their tax due.
Quick timeout for a tax caveat. Note the “could” in the prior statement. Every couple’s tax situation is unique, so more tax cash back from Uncle Sam or a small tax bill is not guaranteed.
2. More access to tax credits: Tax law is very specific about who can and cannot claim certain tax breaks. These limits often apply to tax credits, which are particularly valuable because they offer dollar-for-dollar reductions in tax liability (and sometimes can create refunds).
Married couples who file jointly can claim some tax credits that generally are not available to wedded pairs who opt to file separate 1040s. They include the —
- Earned Income Tax Credit (EITC),
- Adoption Tax Credit,
- Child and Dependent Care Credit, and
- American Opportunity and Lifetime Learning education tax credits.
Tax law also provides married couples with increased income limits for several tax credits. This lets jointly filing couples with a higher combined adjusted gross income (AGI) qualify for these money-saving tax breaks.
3. A special IRA possibility: Today’s economic reality means that both spouses have salary-paying jobs. But in cases where one spouse isn’t part of the workforce — for example, a parent decided to take a break from the 9-to-5 to care for the couple’s children — the non-earning spouse is eligible for a spousal IRA.
Here, the spouse without a wage income contribute to the officially dubbed Kay Bailey Hutchison Spousal IRA. It was named after the former U.S. Senator from Texas who championed the plan.
As long as the other spouse had income, that amount is used to calculate eligibility and contribution limits. And each spouse can put money into the Kay Bailey Hutchison IRA up to the current limits, which are the same as other IRAs. For the 2025 tax year, which has a contribution deadline of this coming April 15, that’s $7,000 per account or $8,000 if you’re age 50 or older.
All other IRA rules still apply, notably that the total spousal IRA contribution cannot be more than the couple’s taxable compensation reported on their joint return. Also, if the working spouse didn’t participate in a workplace retirement plan, all the spousal IRA contributions will be tax deductible.
4. Less tax on residential sale profit: For most of us, our personal residence is our largest investment. It also can provide a nice chunk of change when we sell it. Married couples get a break here, too.
When you and your spouse own a home together, you can exclude up to $500,000 of the taxable profit on the sale of your house. The exclusion amount is just half that for single taxpayers who sells a primary residence.
That $250,000 exclusion limit applies to married homeowners who file separate returns.
5. Larger estate and gift tax options: When your marriage makes it that ultimate death do us part vow, the tax code offers a benefit to the surviving spouse. Married couples can leave an unlimited amount of money to their spouses without generating any federal estate tax.
This delays the tax implications on estates of wealthy couples until the surviving spouse passes away. But before that ultimate, and famous, meeting of death and taxes noted by Benjamin Franklin, the tax code provides married couples other estate benefits.
A married couple can give away twice as much money as single taxpayers without triggering federal gift and estate taxes. For tax year 2025, the annual gift tax exclusion amount was $19,000. It stays at that 19 grand level for 2026.
This means each spouse this year can give their child $19,000 for a combined tax-free gift of $36,000 in 2026. And the gift amount isn’t limited to children or other relatives (in case any flush and generous readers happen to really, really like a certain tax blogger’s musings 😉). A married couple can gift $36,000 to any number of additional recipients this year without having to file a gift tax return.
In addition to the annual gift tax exclusion limit, married couples in 2026 can gift up to $30 million ($15 million per person) over the course of their lifetime to beneficiaries without having to pay any federal or gift tax. The amount is indexed annually for inflation.
Of course, if you have enough money to think about gift and estate tax limits, you also probably have a financial and tax adviser helping you maximize these marital benefits. For the rest of us, though, it’s a fun diversion from our regular, more limited personal budget contemplations.
6. One tax return is easier than two: We all know how complicated the Internal Revenue Code is. One of the few easier things about it for married couples is submitting one tax return instead of two. It even makes life easier for the IRS.
Of course, ease shouldn’t necessarily trump tax savings. And, as noted by the caveat earlier regarding tax brackets, your personal tax circumstances could mean you need to take a different tax filing route.
In many cases, couples should explore their tax options by calculating their ultimate refund or balance due for both joint and separate filings. Then, they use the filing method that gives them the biggest refund or the lowest tax liability.
You also might find these items of interest:
- A 6-point tax checklist for newlyweds
- Valentine’s Day, when thoughts turn to love and taxes
- His? Hers? Does the name listed first on a joint tax return define your marriage?
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