A joint return is a tax return filed together by a married couple, with their income and deductions considered jointly rather than separately. Typically, filing a joint return results in reduced tax liability, making it a popular option for married couples who qualify to file jointly. Policies about such returns vary from nation to nation and tax booklets usually have a worksheet people can fill out to see if they are allowed to file jointly with their spouses.
In a joint return, all of the tax information for both parties is combined. Disparities such as one partner making more than the other are not factored in. Instead, the joint return assumes that each partner contributed equally to household finances and expenses. With the combined information taken into account, people can claim deductions to reduce their overall tax liability, and to determine the total amount of tax they owe.
Depending on the financial situation for a couple, filing a joint return can result in a lower tax bill than they might have if they filed separately. For example, if one partner is a homemaker and the other brings in a large salary, the tax liability should be lower. There may be other cases where filing separately is more advantageous, as when someone needs to have a low income on record to qualify for government benefits and services.
An accountant can provide people with advice about whether filing a joint return is a good financial choice, or people can sit down with tax forms and calculate their total tax liability when filing jointly contrasted with filing separately to see which would make more sense for their financial situation. It is important to follow the directions very carefully to make sure the forms are filled out properly and completely. An innocent accident may result in a request to file an amended tax return to correct the error, while activities believed to be fraudulent can result in penalties from the tax agency.
When filing a joint tax return, it is important to account for all sources of income, as well as potential deductions, including income from private accounts held by one partner only, and other private activities. If people fail to disclose such information on their taxes, they can be penalized for falsifying tax records. Joint tax returns are not an option for people who wish to conceal income or expenses from their partners.
