Many couples sign pre- or postnuptial agreements in order to keep their finances separate and their assets clearly delineated. Such agreements are typically beneficial for both parties, but there can be complications and questions that arise when you and your spouse are not sharing your finances entirely. One of the most common issues is deciding how to complete your taxes in light of your prenup.
You might wonder whether it is ideal to file jointly or separately, and the answer depends on a range of different factors. You should consult with your spouse and a legal representative, if necessary, to determine which route is best suited to your tax and financial needs.
Filing jointly may be beneficial
The most common motivator for filing jointly, of course, is the tax benefit it can offer. Many couples enjoy the benefit of higher deductions and refunds from their returns when they choose to file together. You should not prioritize the short-term financial benefits of jointly filing, however, above the long-term implications it may impose on your finances.
Filing separately may avoid liability
According to Forbes, although filing jointly has some immediate financial benefits, it also makes both spouses entirely liable for the taxes and penalties owed. Many couples enter prenuptial agreements because they want to maintain separate finances. When you file taxes together, you share a major financial responsibility. It is worth considering whether you want to be liable for your partner’s share of taxes as well as your own.
Your prenup may have the answer
Your original prenuptial agreement may have the answer to your question in it, and if not, you might consider adding it. It is common to have a clause indicating whether couples will file jointly or separately, so before you spend time pondering each option, check your prenup agreement to make sure the decision has not already been made.