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Married Filing Separate Tax Returns

Married Filing Separate

The Married Filing Separately filing status provides fewer tax benefits than filing joint returns, but allows you to separate your tax liability from your spouses.

MFS taxpayers also have lower income phase-out ranges for the IRA deduction. MFS taxpayers must also both claim the standard deduction or they must both itemize their deductions. Either way they must file the same.

Taxpayers will need to decide for themselves which is the best filing status for their situation.

Two Reasons to File Separately

Filing separate returns makes the most sense when one spouse owes a significant amount of money, but the other spouse could get a refund.
If you are unsure of the legality of your spouses income or income statements, or you suspect that your spouse is evading taxes, you should know that you could be liable on a joint return. In this case you may want to file a separate return, by filing separately, you may avoid liability for your spouses unpaid taxes due on a joint return, plus penalties and interest.

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:

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
Tuition and fees deduction
Student loan interest deduction
Hope or Lifetime Learning Educational Credits

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, your home was the main home of your child for more than half the year, and your considered unmarried.

The head of household filing status allows you to choose the standard deduction even if your spouse chooses to itemize deductions." IRS Publication 501, Married Filing Separately

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 along with other credits, and your standard deduction will be higher.