Standard deduction for 2022 married filing jointly

Economy

Updated October 24, 20223:59 PM ET Originally published October 19, 20222:05 AM ET

A sign outside the Internal Revenue Service building in Washington, on May 4, 2021. Patrick Semansky/AP hide caption

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Patrick Semansky/AP

A sign outside the Internal Revenue Service building in Washington, on May 4, 2021.

Patrick Semansky/AP

The Internal Revenue Service is increasing its inflation adjustments for the 2023 tax year after prices for rent, groceries and gas have reached heights not seen in 40 years.

The announcement of adjustments is an annual occurrence, but in a year of high inflation, the move to raise the standard deduction and income thresholds where tax rates take effect may mean savings for people in all income brackets.

For those filing as a single person or filing separately from their spouses, the standard deduction is increasing by $900 to a total of $13,850. The standard deduction for married couples filing jointly is increasing by $1,800 from last year, to $27,700. And for people filing as heads of households, the standard deduction will be $20,800 for the upcoming tax year, up $1,400.

Data released by the Bureau of Labor Statistics last week showed that compared to last year, rent is up 7.2%, electricity prices are up 15.5%, groceries are up 13%, and health insurance is about 30% more expensive.

For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.

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Key Takeaways

• For tax year 2022, most married couples under 65 filing a joint return receive a standard deduction of $25,900, while couples filing separately receive a standard deduction of $12,950.

• Joint filers usually receive higher income thresholds for certain tax breaks, such as the deduction for contributing to an IRA.

• If you’re married and file separately, you may face a higher tax rate and pay more tax.

• Filing separately may be a benefit if you have a large amount of out-of-pocket medical expenses. It may be easier to reach the 7.5% threshold of your adjusted gross income to qualify for medical deductions if you only claim one income.

Advantages of filing jointly

There are many advantages to filing a joint tax return with your spouse. Joint filers receive one of the largest standard deductions each year, allowing them to deduct a significant amount of income when calculating taxable income.

Couples who file together can usually qualify for multiple tax credits such as the:

• Earned Income Tax Credit
• American Opportunity and Lifetime Learning Education Tax Credits
• Exclusion or credit for adoption expenses
• Child and Dependent Care Tax Credit

Joint filers mostly receive higher income thresholds for certain taxes and deductions—this means they can often earn a larger amount of income and still potentially qualify for certain tax breaks.

Consequences of filing your tax returns separately

On the other hand, couples who file separately typically receive fewer tax benefits. Separate tax returns may result in more tax.

• In 2022, married filing separately taxpayers only receive a standard deduction of $12,950 compared to the $25,900 offered to those who filed jointly.
• If you file a separate return from your spouse, you are often automatically disqualified from several of the tax deductions and credits mentioned earlier.
• In addition, separate filers are usually limited to a smaller IRA contribution deduction.
• They also cannot take the deduction for student loan interest.
• The capital loss deduction limit is $1,500 each when filing separately, instead of $3,000 on a joint return.

TurboTax Tip: The best way to find out if you should file jointly or separately with your spouse is to prepare the tax return both ways. Double check your calculations and then look at the net refund or balance due from each method.

When you might file separately

In rare situations, filing separately may help you save on your tax return.

• For example, if you or your spouse has a large amount of out-of-pocket medical expenses to claim and since the IRS only allows you to deduct the amount of these costs that exceeds 7.5% of your adjusted gross income (AGI) in 2022, it can be difficult to claim most of your expenses if you and your spouse have a high AGI.
  • For example, if you have $10,000 in medical expenses and made $50,000. That would meet the 7.5% threshold ($10,000 ÷ $50,000 = 20% of your income).
  • Whereas, if together you make $135,000, this would disqualify you from claiming these medical expenses ($10,000 ÷ $135,000 = 7.4% of your income).
• Filing separate returns in such a situation may be beneficial if it allows you to claim more of your available medical deductions by applying the threshold to only one of your incomes.
• When filing separately, both spouses must take the standard deduction or both must itemize their deductions. One spouse cannot itemize their deductions while the other spouse takes the standard deduction.
• When itemizing deductions, each deduction can only be used by one spouse even if both spouses paid for the expense. A deduction can be split between spouses filing separately as long as the total claimed by both spouses does not exceed the total deduction.

For more tips on when you might want to file separately, be sure to check out our article When Married Filing Separately Will Save You Taxes.

Deciding which status to use

The best way to find out if you should file jointly or separately with your spouse is to prepare the tax return both ways. Double check your calculations and then look at the net refund or balance due from each method. If you use TurboTax to prepare your return, we’ll do the calculation for you, and recommend the filing status that gives you the biggest tax savings.

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