Next, you have to determine whether it’s best to file jointly or separately. The fact is that filing jointly is usually the best way to maximize tax benefits, but some couples have financial situations that make it best to file separately. For example, if you were still going to school in the last year and your parents paid for it and want to write off the education expenses, you should file separately this year.
Here you can determine how best to file:
This particular article will help you understand what it means to file jointly by providing a definition and explanation of who benefits most from a joint file. There are pros and cons to both means of filing. The writer also advises same sex couples, who are married in states where same sex marriage is legal, to consult a trained tax professional for their returns.
Some married couples choose to file their taxes separately while still informing the IRS that they are married by filling in “married” next to marital status. Before you decide to file separately, think carefully about your decision and check out this article from About.com because it explains how married filing separately precludes you from taking advantage of certain tax write offs.
Once you’ve determined how you’d like to file or if you’re having trouble with making the decision on your own, you should decide whether to hire a tax professional to help you. Tax professionals can answer your questions and offer advice on how to maximize your refund. But many people find software, such as Turbo Tax, to be just as helpful, intuitive, usually cheaper, and easy to use. It depends on personal preference.
Whatever you decide, make sure that both of you keep your tax forms, receipts, and documents for the last seven years. If you’re ever audited, you’ll need to produce those materials. Keep the lines of communication open and make sure that you’re paying taxes. Even if you get divorced at some point, if one of you hasn’t paid taxes during the marriage, the government could go after both of you for what it is owed.
You might consider using a tax worksheet, a resource that some tax professionals provide to clients, which helps you break out your write offs and keep track of them throughout the year. You could also create such a worksheet for yourself. This is particularly helpful at the end of the year, when you have to fill out all the tax forms, and it helps you keep better track of your spending. Sometimes, just having awareness of where your money is going helps you cut back, save, and budget.
Use tax season as a good excuse to sit down with your spouse and discuss your finances – debts, big expenses, financial goals for the next year, etc. Be wise with your refunds and communicate about what you’d like to do with that money. Your best bet is to put it toward any debt you have to pay off or directly into the bank or IRA to collect interest.