Why does joint filing result in lower tax liability as compared to individual returns?

Answer 1

It is not always true that a married couple filing a joint return is going to pay less tax than if they filed separately. Reasons that their taxes would be less with a joint return include:

1. The Earned Income Credit, Child and Dependent Care Creidt, and education credits are available only to MFJ returns.

2. Deductibility of retirement accounts is more generous with MFJ returns.

3. If a couple files separately, they both must take the standard deduction, or they both must itemize. So, if one can itemize but the other cannot, a joint return is more beneficial.

However, for a married couple with no children, no retirement contributions, no education credits, and who take the standard deduction, there is little or no difference in the taxes owed by filing jointly or separately.

Answer 2

If you use standard deduction, there is no difference between two individual tax liabilities or joint tax liability since standard deduction for joint filers is exacltly two times more than individual filers. If you have itemized deduction, this could change the situation if one individual itemizes and one is taking the standard deduction. Both situation describes individuals and joint filers without dependends.

Answer 3

It can, especially if only one of the people has income, or if the incomes are very different. The tax computation essentially splits the income evenly between the people and taxes it that way.

If both incomes are about equal, then the tax isn't lower.

Answer 4

Basically because that's the way the law was written.