If you are married by the end of year (December 31), you have the option to file a joint return, or each spouse can file his/her separate return.
Joint return is better to save taxes, especially where one spouse earns all or substantially taxable income. By filing joint return you can use the joint return tax rates.
More so, for several tax benefits, if eligible, are available on joint return, unless separation rule is available, such as :
• To Claim IRA deduction for a non-working spouse;
• To claim dependent care credit;
• To claim earned income credit;
On the contrary, filing a separate return has its own key points. Separate returns may save taxes, if filing separate returns allow you to claim more deductions, such as medical expenses, casualty losses and miscellaneous expenses deductions.
This situation usually happens where both the spouses have separate incomes at a level where joint tax rate does not affect in savings, and have eligible deductible expenses.
Separate return is also better if you are suspicious of your spouse tax reporting and want to evade joint tax responsibility.
Separate Returns can be amended to joint, but joint return not to separate, once the due date has passed.
In a separate return both the spouses will maintain uniformity, either both will claim standard deduction or itemized of their deductions, unless you are qualified for Head of House Hold Status.