Married taxpayers can choose between filing a joint tax return or a separate tax return. The Married Filing Separately filing status provides fewer tax benefits than filing joint returns, but taxpayers will need to weigh the pros and cons and decide for themselves which is the best filing status.
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If you are married, then you and your spouse can file separate tax returns. The married filing separately (MFS) filing status is the least beneficial of all the filing statuses. That's because MFS taxpayers are not eligible to claim the following tax benefits:
- Tuition and fees deduction
- Student loan interest deduction
- Tax-free exclusion of US bond interest
- Tax-free exclusion of Social Security Benefits
- Credit for the Elderly and Disabled
- Child and Dependent Care Credit
- Earned Income Credit
- Hope or Lifetime Learning Educational Credits
Additionally, MFS taxpayers must both claim the standard deduction or must both itemize their deductions. In other words, one MFS taxpayer cannot claim the standard deduction if the other spouse is itemizing.
Does it make sense to file separately? The editors of JK Lasser's Your Income Tax advise:
"If you suspect that your spouse is evading taxes and may be liable on a joint return, you may want to file a separate return. By filing separately, you avoid liability for unpaid taxes due on a joint return, plus penalties and interest." (page 11)Married taxpayers may be eligible to file using the Head of Household filing status if your spouse did not live with you during the last six months of the year and your home was the main home of your child for more than half the year. Here's what the IRS has to say:
"You may be able to choose head of household filing status if you live apart from your spouse, meet certain tests, and are considered unmarried.... This can apply to you even if you are not divorced or legally separated. If you qualify to file as head of household, instead of as married filing separately, your tax may be lower, you may be able to claim the earned income credit and certain other credits, and your standard deduction will be higher. The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions." (From IRS Publication 501, "Married Filing Separately")
