Joint Return

Always Be Closing—ABC Definition

DEFINITION of joint return

A joint return is a tax return filed with the Internal Revenue Service (IRS) on Form 1040, 1040A or 1040EZ by two married taxpayers whose filing status is married and jointly filed (MFJ) or by a widowed taxpayer whose filing status is Eligible Widow or Widower (QW). A joint declaration allows these taxpayers to combine their tax obligations and to declare their income, deductions and credits on the same joint declaration.

BREAKDOWN Joint return

A joint declaration allows eligible taxpayers to calculate their taxes using favorable tax brackets, tax rates and tax advantages. As a result, married couples who file a joint return generally pay a lower overall tax than married couples who file two separate returns.

Who is eligible to file a joint return

To file a joint return, the taxpayer reporting status must be Married jointly filing (MFJ) or Eligible widow / er (QW). To be eligible for Joint Filing (MFJ) status, taxpayers must be legally married on or before the last day of the taxation year, and both must agree to file and sign the joint declaration. To be eligible as an eligible widow (QW), the taxpayer’s spouse must have died in one of the two preceding taxation years and the taxpayer must maintain a household for a dependent child.

Definition of married in a joint relationship

Whether or not taxpayers are considered married on the last day of the tax year is determined by the law of the state or applicable jurisdiction. Homosexual marriages legally concluded are recognized for all federal tax purposes. Taxpayers who divorce or separate under a separate divorce or support order that is final at any time during the taxation year are considered unmarried for that year and cannot file joint declaration.

Benefits of a joint return

Married and non-widowed taxpayers must choose one of two filing statuses: joint filing (MFJ) or separate filing (MFS). Joint filing will likely result in a tax reduction if one of the spouses earns most of the income and the deductions will not be itemized. Separate filing can result in a tax reduction if both spouses earn the same income and one or both have medical expenses, losses or miscellaneous deductions, since the joint and separate tax rates are likely to be the same and adjusted gross income floors will be lower. Whenever both spouses earn taxable income, tax must be calculated jointly and separately and a return must be filed using the status that provides the lowest tax.

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