What benefits are there being married tax wise?

Question

I am married w/a newborn. I am going to attend college part time this fall and I am going back to work full time for the rest of this year.

I am shocked that I can't claim HOH (which makes sense but it didn't register with me until just now). Why am I unable to get the EITC (I ran it on irs.gov)? I thought that married people could also receive the EITC, I am a little confused?

Answer 1

The rates for married filing a joint return are BETTER than the rates for head of household.

As for EITC, married couples CAN get EITC if they file a joint return.  And filing a joint return is almost always the best way for them to file, rather than the alternative of married filing separately.  With a status of married filing separately, you can't get EITC.  The JOINT income of a couple is taken into account to qualify for EITC, since the purpose of EITC is to help people with low household incomes who work.  A married couple filing a joint return can qualify for EITC with a higher income than a single parent, since there's an extra person in the household to support - for 2007, a married couple filing jointly could get EITC with income up to $39,783, while someone filing as single or as head of household could get it only up to $37,783.

Answer 2

There are no tax benefits to being married for the most part.  As you have discovered, folks of modest means can lose out on tax benefits when they marry.  The EIC is an excellent example, since the ceiling for a married couple is the same as it is for a Single or HoH taxpayer.

Your options now are Married Filing Separately or Married Filing Jointly.  You can't claim the EIC if you file MFS, and you lose out on other tax benefits as well such as educational credits or the tuition deduction.  MFJ works out better than HoH did, so you'd be best off filing that way in most cases.

Answer 3

Married people do get EITC by filing jointly with their spouse.  You will get a lower overall tax rate by filing married.  You can't file as head of household while you are married unless you have a child and live apart from your spouse for at least six months during the year.

Answer 4

Being married does not prevent you from receiving EIC if you file a joint return, which you likely should.  If your combined income is greater than the EIC limit you also will not get that benefit as it is intended for low income folks.