I had just completed the return for a long-time client, and he asked the question, “Does my being married change my return?” I said it did, and asked when he got married; he responded, “Last Valentine’s Day.” It must be something in the Vegas water: every year clients forget to mention that their marital status has changed. (And, yes, we ask that question in our Organizer that every client receives!)
With weddings comes changes in tax status. Your marital status on December 31st determines your marital status for the year. If you are married, you file as Married Filing Jointly or Married Filing Separately. (In some rare cases, if you’re married you can file as Head of Household.) But you can’t file as single. Likewise, if you’re single you can’t file as married.
People try to file as single when they’re married. There’s a good reason for that, of course: you save on taxes. A big issue is rental real estate: If you’re actively involved in rental real estate you get to take losses of up to $25,000. But there’s an income cap (the deduction begins to phase out at an income of $100,000 and completely phases out at $150,000). This particular deduction is neither indexed for inflation nor does it vary if you are single or married. (There are numerous other areas of the Tax Code that penalize marriage.)
There’s a problem taking deductions you’re not entitled to: tax evasion. It’s a Bozo act to claim things you’re not entitled to.
Marriage has its ups and downs. Claiming you’re single on your tax return when you’re married will in the long-run cause you nothing but downs. Thankfully, my client and his spouse are now discussing if they will each file “Married Filing Separately” or if they will file a joint return.
