Married Filing Separately

Married filing separately is a tax status used by married couples who choose to record their respective incomes, exemptions and deductions on separate tax returns. In most cases, married filing jointly offers the most tax savings, especially when the spouses have different income levels. However, there is a potential tax advantage to filing separately when one spouse has significant medical expenses or miscellaneous itemized deductions—or when both spouses have about the same amount of income.

Married filing separately may be appealing to couples who find that combining their incomes pushes them into a higher tax bracket than either of them would be in if they filed separately—meaning their tax bill goes up accordingly. It’s worth remembering, however, that filing separately means you are unable to take advantage of a number of potentially valuable tax breaks, including the child and dependent care credit, hope and lifetime learning credits, and adoption expense credit, as well as deductions for your contributions to a Traditional IRA.

According to the IRS, if you and your spouse file separate returns and one of you itemizes deductions, the other spouse will have a standard deduction of zero. Therefore, the other spouse should also itemize deductions. Note that beginning in tax year 2018, the standard deduction rises substantially—to $12,000 for individuals and $24,000 for married couples filing jointly. As a result of this change, one spouse must have significant miscellaneous deductions or medical expenses in order for the couple to gain any advantage from filing separately.

Tax bills aside, there is one scenario in which married filing separately may be especially wise. If you don’t want to be liable for your spouse’s taxes, consider filing separately. For instance, if you know—or even suspect—your spouse is hiding income or claiming deductions or credits falsely, it may be wise to file separately. Signing a joint return means that both spouses are responsible for the accuracy of the return—and for any tax liabilities or penalties that may apply. By only signing your own return, you are only responsible for the accuracy of your own information, and for any tax liability and penalties that may ensue.

Also note that if you live in community property states including Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, you may need to see a tax professional because the rules about separate incomes can be tricky.