Married file separately

Here's how it works and when it could benefit you. Married filing separately is one of five tax-filing statuses available to taxpayers.

Under the married filing separately status, each spouse files their own tax return instead of one return jointly. Instead of combining income, each person separately reports income and deductions. Although most married couples file jointly, they can choose the married filing separately status if they want.

There are rules to follow for filing separately, though. If one spouse itemizes instead of taking the standard deduction , for example, the other spouse must itemize, too. Only single people can file single, and their tax brackets are different in some cases from the ones that will apply to you if you're married and filing separately. Nonetheless, in the right circumstances, being married and filing separately could save you money. Income-based repayment programs generally key off adjusted gross income , or AGI.

Is it easy to use? Free version? Generally, you can deduct unreimbursed medical expenses — but only the portion that exceeds 7. Related Items: Married With Children. Married without Qualifying Children. Single Head of Household with Children. Single without Qualifying Children. This page is designated as historical and is no longer updated.

Page Last Reviewed or Updated: Feb Wrong—many couples don't realize that filing separately might be the better move, in terms of tax strategies. In some instances, love doesn't have a place in your tax return. There are a number of reasons why the married-filing-separately status is seldom chosen by couples.

The biggest reason is the forfeiture of a number of major tax credits and deductions that are available to those who file jointly, such as:.

Another limitation when it comes to married filing separately: Both spouses must choose the same method of recording deductions, even if one of them would be better off doing so under the opposite method. For example, if one spouse decides to itemize deductions , the other spouse must do so as well, even if their itemized deductions are less than the standard deduction.

This means that filing separately is a good idea from a tax-savings standpoint only when one spouse's deductions are large enough to make up for the second spouse's lost deduction amount. There are a number of situations, however, in which it is best for a couple to file separately:. Legal separations were the original rationale for the creation of the "filing separately" status. For a variety of reasons, divorcing or separated couples may not be willing to file their taxes jointly.

Filing separately also may be appropriate if one spouse suspects the other of tax evasion. In that case, the innocent spouse should file separately to avoid potential tax liability due to the behavior of the other spouse. This status can also be elected by one spouse if the other refuses to file a tax return at all. Protecting yourself from a negative outcome isn't the only reason to file separately.

Today, even the most happily married couple may come out ahead by choosing this route. The primary instance is with childless couples, in which one spouse has a considerably higher income and the other spouse has substantial potential itemized deductions. The IRS rule for deducting unreimbursed medical expenses dictates that only expenses in excess of 7. Even if, in a normal year, it would make more sense for this couple to file jointly, in the year of the big medical expense, filing separately might make more sense.

The source of funds is highly important in this type of situation. According to the IRS, "If you and your spouse live in a noncommunity property state and file separate returns, each of you can include only the medical expenses each actually paid. Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise.

There are many factors involved in determining whether it is better for married couples to file separately or jointly. When a couple is unsure of which filing status to choose, it makes sense to compute the tax return both ways to determine which will give the biggest refund or lowest tax bill.

In general, couples with no dependents or education expenses can benefit from filing separately if there's a big disparity in their respective incomes, and the lower-paid spouse is eligible for substantial itemizable deductions.

Generally, other instances when filing separately is appropriate are related to divorce, separation, or relief from liability for tax fraud or evasion. If you are unsure whether the married-filing-separately strategy is appropriate for you, consult your tax advisor. You never know whether there are any tax deductions you may be missing.