Returning income tax is a national responsibility of every citizen.
When the IRS department asks about filing, there are two options. The married couple can file the information jointly or separately. Both these two decisions are wise in some aspect. But through this discussion, we are going to clarify the most preferable option.
One of the great questions of all marriages and couples in fact when making the income statement is a form of individual conjunction, since the Tax Agency offers both possibilities. Both are especially crucial for those who have recently changed their status and have been married.
Who can make the joint declaration?
Before entering into the matter, it is important to clarify who can make the joint declaration. It is vital to define this concept properly to avoid misunderstandings. And is that in principle, only people integrated into a family unit have the option of taxing together. This is an important restriction, since it leaves out de facto couples who do not have children.
Joint or individual?
Once defined what is considered family unit and therefore who can access joint taxation in the income statement, we go with the question we formulated at the beginning of the article. Although there is no universal rule to determine whether it is better to tax jointly or individually, there are some repeating fiscal guidelines that make one model or another the most advantageous.
Firstly, it must be taken into account that the choice of one or another formula to make the declaration of the IRPF, will depend on the personal circumstances of each couple. However, in general it can be said that the joint declaration is more profitable when one of the spouses does not work or does not exceed the personal and family minimum, while in the opposite case it is better to do it individually.
When it comes to individual taxation, it is important to bear in mind that individual income must be separated and individualized, which implies not only income from work or economic activities, which is relatively simple because it is attributed to those who have Generated, but also the rest of the heritage. This includes widows’ pensions, pension plans, insurance, current accounts, investments…
The first three are also easy to identify, because they will fall on the side of the person in whose favor they are recognized. In the case of the profits obtained by the performance of the private assets, each spouse will remain with those that are in his name and those of capital will be charged to 50% for each one of them.
As for current accounts, each spouse will be taxed by those who appear in his name and the joint ones will be charged to 50% for those who have chosen the regime of separation of goods. On the other hand, those who are taxed on profits must pay all 50%.
Advantages and disadvantages of joint taxation.
When it comes to addressing income 2015 and deciding between joint or individual, the first thing you should be clear is that not to do the IRPF as a couple or as a family unit broad limits of the tax. In this line, the limits to know whether or not you are required to file the return will be the same 22,000 euros for single payer income whether done individually or jointly. The same happens with the rest of rents obtained by the family unit and with the tax levy scales, which will be the same in both cases.
If you opt for the joint return, the incomes of the whole family unit will add up and, logically, it is easier for the result to be in the higher sections than in the lower ones. That is why it is said that if the two spouses get high rents does not usually offset the joint statement.
What happens after marriage?
The couple shares every single information with the local and central government. This is necessary for availing some advantage. Tax information is also a part of updating information. There are some couples who choose to file information without knowing the real fact beyond it. Let us take a look on the effects of filing separately.
When you are filing tax information separately, you are basically hiding the proper personal data from the government. This is advantageous for getting an aid for personal tax return. But in the long run, spouses will miss the other advantages.
On the other side, joint filing is really important. It contains the up to date information. If you can find an expert in this field, there is a chance of shortening the income tax return. And who does not want to lower the bill? So, it is wise to file the information jointly.
Jointly filing tax billing information lets the couple to be a part of the liability.
If there is any problem faced by one spouse, the other one can take the responsibility. In short, it has a prestigious side. For example, deduction in some tax bill is only available for married couples. The percentage is calculated upon the age of the spouses and their income. This is called Adjusted Gross Income or in short term AGI. You can find three fundamental parts of AGI.
First one comes up with Medical expenses. This deduction can be altered in a region of 7.5-10% of the total income. Spouses above 65 years old get 7.5% deduction considering their incomes.
Casual losses are included as the second part. Joblessness and recession are considered in this portion.
Some miscellaneous deductions are also available only for those couples who file their tax information together.
To gain tax credits and loans, this is a great option to file it jointly. If you are unable, then your spouse can pay it off. As the laws of income taxes are not flexible, it will be wise of the married couple to communicate with an expert attorney for this purpose.