What is the difference between an individual and a joint tax return?
As a general rule, the Income Tax Return is filed individually. However, people who are part of a family unit can choose to file a joint return.
The choice between one option or the other depends on which is more favorable.
- If only one member of the family unit has income (for example, one works and the other does not), filing a joint return is usually more beneficial.
- On the other hand, if both taxpayers have income (for example, both work), filing individual returns is normally more advantageous.
What is considered a family unit?
Depending on the family situation, a family unit can be formed in the following ways:
- Married couples: consisting of both spouses who are not legally separated, along with their minor children or adult children who are legally incapacitated and live with them.
- Single-parent families: consisting of a father or mother (unmarried, widowed, or legally separated) together with the children who live with them.
- Registered domestic partners: only one member of the couple can form a family unit together with the children who live with them. The other partner must file individually.
This means that for Income Tax purposes, a domestic partnership is not considered a joint family unit, since the law only recognizes this possibility for married couples. Therefore, in the personal information section, the system will show this status as “single,” even if there is a domestic partnership in practice.
When children are under shared custody, either parent can choose to file a joint return with the children.
- If one parent chooses a joint return, the other must file individually.
- Regardless of the chosen filing type, the dependent child allowance is prorated 50% between both parents, unless the child is declared jointly with one of them. In that case, the parent filing with the child applies the full allowance, and the other parent does not.
What does filing a joint return imply?
- The income of all members of the family unit is added together and taxed jointly.
- Limits or deductions are not multiplied by the number of members.
- A joint return entitles the taxpayer to a reduction in the taxable base of:
- €3,400 for family units formed by marriage
- €2,150 for single-parent family units
Important: The composition of the family unit is determined according to the situation on December 31 of the corresponding year.