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The Case for Married Couples to File Joint Tax Returns or Separate Tax Returns
By Chris O’Shea* The annual tax season comes with a question for married couples: Do you file jointly or separately? While most married couples file together, there are some reasons you might want to consider filing separately.
Here’s the case for both methods.
Why You Should File Jointly
Lower tax rate. Typically, married couples who file jointly enjoy a lower tax rate than married couples who file separately.
Tax benefits. As US News reports, if you’re married, you need to file jointly to qualify for some tax breaks. If you file jointly, you’re eligible for the Earned Income Credit, the American Opportunity Credit, the Lifetime Learning Credit, student loan interest deduction and more.
Deducting retirement contributions. If you file jointly, you’ll have higher income cutoffs to make Roth IRA contributions. Married couples can contribute to a Roth IRA if their adjusted, joint-tax return lists a modified adjusted gross income of less than $208,000 in 2021. If you’re married and filing separately, the income cutoff drops all the way down to less than $10,000.
Why You Should File Separately
You and your spouse are high earners. If you and your spouse earn high incomes that are roughly the same, it might make more sense to file separately. Your tax rate might actually be lower if you take the separate returns route.
You have high medical costs. Another reason to file separately is if you have high medical bills. You can deduct unreimbursed medical expenses, but only if they exceed 7.5 percent of your adjusted gross income. If you have extensive medical bills, it might make sense to file by yourself so you can easily cross that 7.5 percent threshold.
You’re concerned about liability. If you’re concerned about tax liability, you might want to file separately. If you file your own forms, you won’t be tied to your partner’s potential tax or legal issues.
This guest article is from the “Your Money Blog” in ‘Mid Oregon’s Digital Banking Credit Savvy resource’. It is made possible by Savvy Money. “The Case for Married Couples to File Joint Tax Returns or Separate Tax Returns” was published in March 2021.
Credit Savvy free credit scores—now even better!
Credit Savvy, our free credit score and monitoring tool, is now even better! The updated feature includes some new and enhanced features, including some you just won’t see in other products of its kind. Here are some of the things that will look a little different when you open up the new and improved Credit Savvy tool:
- Score Analysis. Easily and quickly understand all of the factors that influence your credit score. You’ll see detailed explanations and some ideas for improving your score.
- Personalized Recommendations. We automatically look to see if we can lower your monthly payments on your current or future loans and credit cards.
- Credit Score Event Chart. Visualize the impact to your credit score over time and how key changes can impact it.
- Simulator—all new! Your choices can cause your score to move up or down. Simulate your credit score by selecting possible actions
and see how your score reacts. For instance, you can find out the potential impact to your credit score of such actions as paying off a debt, skipping a payment, increasing a credit limit, or applying for a new loan.
Easy access within Digital Banking
And the best thing about Credit Savvy is you don’t need to share your personal information or create a new login with another company—it’s all located securely inside Mid Oregon’s Digital Banking platform.
Just click the the More…. button on your Dashboard or Accounts view on your computer or mobile device to find the Credit Savvy widget. Answer a few questions to enroll, and you’re all set! You’ll have access to your updated credit score anytime, anyplace.
Take control of your credit score. Try Credit Savvy today!
High Desert Museum Access Programs Sponsored by Mid Oregon
You may miss Mid Oregon Credit Union’s Free Family Saturday at the High Desert Museum. We certainly do! With Oregon’s COVID-19 regulations, the Museum cannot offer these events. Mid Oregon wanted to continue supporting community access to the Museum. So, we are sponsoring the High Desert Museum Access Programs. These programs provide free and reduced admission to ensure educational experiences are accessible.
Wonder Wednesdays
Wonder Wednesdays offer engaging activities for students, parents and/or caregivers visiting with pre-kindergarten to 12th-grade children from Deschutes, Jefferson, Crook, Lake, and Klamath counties. So, these visitors receive a reduced admission price of $5 per person.
Museum and Me
Museum and Me is an after-hours Museum time for children and adults with physical, intellectual, and/or social disabilities. To note, this program is held one evening per quarter and free to individuals, friends, and family.
Discovery Passes
Discovery Passes provide free Museum admission to targeted youth and adult social service organizations in the community.
Blue Star Museums
Blue Star Museums is for active-duty military, National Guard, and Reserve military personnel and their families. So, they may visit the Museum at no charge year-round.
Little Wonders
Little Wonders is a partnership with NeighborImpact. This program provides free annual membership to Head Start kids and their families in the community.
Museums for All
Museums for All is for families with Electronic Benefits Transfer (EBT) cards. So, they may visit the Museum at a reduced admission price of $2 per person. Just present an EBT card and photo ID for access. This rate is offered for up to six individuals (up to two adults and four children) per EBT card and valid during regular business hours.
In addition, the Museum offers free admission for mothers on Mother’s Day and fathers on Father’s Day. To learn more about the High Desert Museum Access Programs, visit highdesertmuseum.org/access-programs. Please note: due to limited Museum capacity, visitors should reserve timed-tickets online prior to visiting.
Last but not least, the High Desert Museum recently reopened its interior exhibits with the Deschutes County’s change in COVID-19 status. Quite exciting news, indeed! We encourage you to explore all the High Desert Museum has to offer.