Married Filing Jointly – MFJ: Both the spouses income whether earned or unearned income can be added on Married Filing Jointly tax return, in turn a primary tax payer can claim a standard deduction amount of $25,100 on tax returns. Even if one spouse has income and the other does not still a husband and wife can file their filing status as MFJ. When married filing jointly tax return is filed both the spouses will be liable for taxes.
A standard tax return is filed by resident aliens, non-resident aliens, green card holders and citizens, forms are 1040, 1040SR and 1040NR.
- A husband and wife should have got married on any day of a tax year for which you are filing your tax returns.
- Marriage should have been recognized by any state government.
- Husband and Wife can file MFJ though they did not live together, but should not have been divorced.
How does standard deduction works For Married Filing Jointly?
As we learned that standard deduction reduces your taxable income, let’s go through the tax brackets below by which your taxable income is calculated for Married Filing Jointly (MFJ), in order to get qualified for standard deduction a tax payer should be eligible for any of the Green Card Test, Substantial Presence Test.
Resident aliens and USA citizen’s tax payers will be taxed on worldwide income
Why claim dependents on tax returns?
Married tax payers can claim spouse, kids and quailed dependents on tax return, unmarried tax payers can claim qualified dependents on tax returns, in order to claim dependents on tax returns all the dependents should have SSN/ITIN/ATIN.
There are three tests for claiming dependents on tax returns:
- Dependent Taxpayer Test
- Joint Return Test
- Citizenship or Residency Test
What is the test for qualifying child?
- Relationship Test
- Age Test
- Residency Test
- Support Test
Note: According to the new tax amendment, a tax payer cannot claim personal and Dependency Exemptions.
What is ITIN?
ITIN (Individual Tax payer Identification Number) consist of 9 digits which is issued by IRS and is must to claim dependents on tax returns, ITIN is valid up to five years there after it can be renewed. ITIN is used for tax purposes, those who are not eligible for SSN need to apply ITIN.
Documents required to get ITIN?
A tax payer can get ITIN for his/her dependents and the process is pretty simple, below are the required documents and procedure to apply ITIN.
- Filled W7 form (ITIN application form)
- Current year tax returns
- Original any Identity document of any country which should have issued date and expiry date/ Certified copies of ID.
Condition: In order to claim a dependent on your tax returns, the dependent/dependents should have stayed in USA for more than 183 days.
Time required to get ITIN?
All the required documents for ITIN can be mail to ITIN processing centre or can even submitted at the Tax payer assistance centre. It will take at least 7 weeks to know the status; once the ITIN is issued IRS will send you the ITIN number through postal mail.
2021 Married Filing Jointly Tax brackets:
|$0 to $19,900||10% on Taxable Income|
|$19,901 up to $81,050||$1,990 + 12% of the amount over $19,900|
|$81,051 up to $172,750||$9,328 + 22% of the amount over $81,050|
|$172,751 up to $329,850||$29,502 + 24% of the amount over $172,750|
|$329,851 up to $418,850||$67,206 + 32% of the amount over $329,850|
|$418,851 up to $628,300||$95,686 + 35% of the amount over $418,850|
|$628,301 or more||$168,993.50 + 37% of the amount over $628,300|