Jackson Hewitt's Weekly 'Tax Time Tip': Love is in the Air: How Relationship Changes Can Affect Your Tax Return

PARSIPPANY, N.J., Feb. 13 — Jackson Hewitt Tax Service(R) (NYSE: JTX), the nation's second largest tax preparation service, continues its weekly series, "Jackson Hewitt Tax Time Tips," with special tax considerations for those who have had a change in their relationship or lifestyle status during 2005.
This Week's Tip: Thoughts of romance and love abound as we approach Valentine's Day. And for those newly married in 2005, there are several tax considerations to keep in mind as you prepare to file your 2005 income tax return, including two new pro-taxpayer tax breaks.
• If you walked down the aisle prior to December 31st, the government considers you married for the entire year for tax purposes, but you do have a choice of filing jointly or separately. "In general, preparing a return as a married couple filing jointly may give you the lowest tax liability and the highest standard deduction, but to find the best scenario, it's wise to calculate your return both ways and see which is the most advantageous for you," explains Mark Steber, Vice President of Tax Resources, Jackson Hewitt Tax Service. "For example, if both of your incomes are about the same, you may pay less in taxes by filing jointly, depending on the rest of your return."
• If you are married or tied the knot in 2005, there are two notable tax breaks now available to you. For married couples filing jointly, the 15% tax rate bracket has been expanded to $59,400 - up from $58,100 in 2004. "This means that a couple with a joint taxable income of $80,000 this year will have $13,336 in tax, saving $145 from the previous year," notes Steber. "Also, the standard deduction for married couples filing jointly has increased to $10,000 in 2005, from $9,700 in 2004. This change will be most significant for couples that do not itemize their deductions."
• Keep in mind that the 15% tax bracket for married filing jointly filers was expanded to twice the income range as that of a single filer, reducing the marriage penalty.
• All paperwork needs to be updated with the legal name for each person, including any name changes that arise from getting married (or divorced). It is important for the name listed with the Social Security Administration to match all forms of identification and paperwork from employers, loan holders, and investment accounts. If there is a discrepancy, the tax return will be rejected, delaying your filing and any expected refund.
• On a joint return, the couple reports the combined income and takes combined allowable deductions. It is possible to file a joint return even if only one member of the couple had income during this period. Filing separate returns can be advantageous if you prefer to be responsible for your own tax liability.
For those who were separated during the entire last half of the tax year, filing as Head of Household may be an option. If you obtain an annulment that declares your marriage never existed, you are considered unmarried for this and any previous tax years. You must amend your tax returns for all the tax years not affected by the statue of limitations for filing a return (usually three years) to reflect this change in marital status.
For more information on this, we encourage you to visit your local Jackson Hewitt Tax Service location or the Jackson Hewitt website at http://www.jacksonhewitt.com for information on filing status and other topics, such as: "What to Bring to Your Tax Preparation Session" and "The Top 50 Most Overlooked Deductions."
Contact: Allison Jackson, Jackson Hewitt Tax Service Inc., 973-630-0681, allison.jackson@jtax.com; Melissa Connerton, CooperKatz & Company, 212-455-8001, mconnerton@cooperkatz.com
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX) is the second largest tax preparation service company in the United States with franchised and company- owned offices in 49 states and the District of Columbia. Specializing in electronic filing (IRS e-file), the Company provides full service, individual federal and state income tax preparation and facilitates related financial products. Most Jackson Hewitt offices are independently owned and operated. Jackson Hewitt is based in Parsippany, New Jersey. More information about the Company may be obtained by visiting the Company's Web site at http://www.jacksonhewitt.com. To locate the Jackson Hewitt office nearest to you, please call 1-800-234-1040.
SOURCE Jackson Hewitt Tax Service Inc.

CONTACT:
Allison Jackson of Jackson Hewitt Tax Service Inc.,
+1-973-630-0681, allison.jackson@jtax.com; or,
Melissa Connerton of CooperKatz & Company,
+1-212-455-8001, mconnerton@cooperkatz.com