The IRS uses your Dec. 31 status to set your tax rules, which determines your filing status, the size of your standard deduction, which credits you qualify for, and how much you can contribute to certain retirement accounts without penalty or phase-out restrictions. This information can also affect tax brackets, which are not the same for every filing status. For tax year 2025, a married couple filing jointly gets double the deduction of a single filer, which directly reduces taxable income. The standard deduction gap between single and married joint filers is the most immediate financial impact. Taxing separately can cost thousands of lost credits and benefits, and potentially lead to higher tax rates for couples with significant incomes.