Governments at all levels require resources in order to operate and provide services. Local governments typically depend on a combination of sales and property taxes for their resources. State governments typically rely on a combination of income and sales tax revenue. The federal government is funded primarily through the collection of income taxes. Not all income is subject to taxation, however, and different filing statuses are provided with different levels of standard deductions. Married individuals have the option of filing jointly or separately.
The Internal Revenue Service (IRS) uses the individual taxpayer's filing status to determine the appropriate standard deduction, the appropriate amount of taxes due, the taxpayer's eligibility for certain tax credits and filing requirements. Some taxpayers, including married individuals, may be eligible to file under more than one filing status. The IRS recommends taxpayers figure their taxes using each eligible filing status, and file their taxes using the filing status that results in the lowest tax liability.
An individual's marital status for federal income tax purposes is determined by her marital status as determined by her state of residence, as of the last day of the calendar year. An individual who is married on the last day of the year is considered by the IRS to be married for the entire year. An individual who is unmarried on the last day of the year is considered by the IRS to have been unmarried for the entire year. Individuals who are married as of the last day of the year may elect to file their taxes as either married filing jointly or married filing separately, but both spouses must file using the same status. If one spouse files separately, both must file separately.
Most married couples file their taxes under the married filing jointly status. Married couples can file a joint tax return even if one spouse did not have any income. Married couples who file jointly are considered to be a single entity by the IRS. All income and deductions for both spouses are combined. This typically results in a lower tax liability than if the spouses filed a separate return.
Married individuals may elect to file separate returns, but if one spouse files a separate return both spouse must file separately. The combined tax liability for both spouses is typically larger for married couples filing separate returns than for those filing joint returns. Certain tax deductions and tax credits, such as the earned income credit and the lifetime learning credit, are not available to those filing separate returns. Married individuals typically file separate returns when they only want to be responsible for their own income taxes or if filing separately results in a lower tax liability.
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