For married couples who reside in Maryland, the question of whether to file taxes jointly or separately can be a burdensome task. Many people assume that joint filing is expected or more advantageous, but the interaction of federal and state tax laws can complicate the decision. Baltimore-based tax law firm Rosenberg Martin Greenberg can help families discuss and navigate the relative considerations as they prepare to file their taxes.
Federal tax benefits for couples who file jointly
Federal law effectively encourages married couples to file jointly because doing so makes them eligible for a number of deductions and credits including:
- Child and Dependent Care Credit
- Earned Income Tax Credit
- Credit for Elderly or Disabled
- Interest paid on student loans
- Education tax credits, including American Opportunity and Lifetime Learning
- Exclusion for interest income from U.S. savings bonds that were used for education purposes
- Adoption Credit and exclusion for adoption expenses
In addition, taxes may be higher for separate filers due to a potentially smaller Child Tax Credit and higher taxation of their Social Security income and retirement benefits.
Joint Filing in the state of Maryland
Many states essentially double the tax bracket for married couples, though Maryland does not. Maryland is not alone – 23 states and the District of Columbia have declined to raise the tax bracket to reflect the effect of marriage. Naturally, this exposes married filers to a higher tax rate than if each spouse were to file separately.
In deciding whether to file jointly or separately, there are other factors to consider. For instance:
- Married couples must elect the same status. If one spouse itemizes, the other may not choose the standard deduction.
- Some separate adjusted gross incomes (“AGI”) may be advantageous for deductions that are based on AGI. For example, if one spouse has substantial medical bills, filing separately may result in a lower AGI for that spouse. Thus, providing a lower threshold for the deduction of medical expenses that exceed 10% of their AGI.
Though legal considerations are paramount in your decision as to whether to file your taxes with or without your spouse, personal circumstances play a significant role in determining the right choice for each of you. Consultation with a tax attorney is always recommended to help reveal the full picture and choose the correct course of action in light of all the information surrounding a couple’s unique financial situation.
Taking the mystery out of filing Maryland taxes
When it comes to taxes, it pays to do it right with the help of legal counsel. With offices in Baltimore and Annapolis, the Maryland tax attorneys at Rosenberg Martin Greenberg serve married couples, individual filers, and businesses throughout the country. Call and make an appointment with an experienced tax lawyer and start making the right choices today.
Additional tax resources for married couples filing in Maryland:
- Comptroller of Maryland, Determine Your Filing Status, http://taxes.marylandtaxes.gov/Individual_Taxes/Individual_Tax_Types/Income_Tax/Filing_Information/Determine_Your_Filing_Status/
- Tax Foundation, Maryland’s Tax Code Shouldn’t Penalize Marriage, https://taxfoundation.org/maryland-marriage-penalty/