What Is Married Filing Separately?

Married filing separately refers to a tax status used by married couples who choose to record their respective incomes, exemptions, and deductions on separate tax returns. 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.

Key Takeaways

  • Married filing separately is a tax status used by married couples who choose to record their incomes, exemptions, and deductions on separate tax returns.
  • Filing separately may keep a couple in a lower tax bracket and, therefore, keep each individual's tax liability at bay.
  • If one spouse itemizes deductions, the other should as well.
  • Although couples may benefit from filing separately, they may not be able to take advantage of certain tax benefits including credits geared to couples who file jointly.

Understanding Married Filing Separately

The Internal Revenue Service (IRS) gives taxpayers five different tax filing status options when they submit their annual tax returns: Single, married filing jointly, married filing separate, head of household, or qualifying widow(er). Anyone who files as married filing separately—or married filing jointly—must be married as of the end of the tax year. So someone who files as married on Apr. 15, 2020 should have been married no later than Dec. 31, 2019. Even though the couple files separately, the IRS requires taxpayers to include their spouse's information on their returns.

Using the married filing separately status may be appealing and have financial advantages to certain couples. Combining their incomes and filing jointly may push them into a higher tax bracket and, therefore, increase their tax bill. Filing separately may keep a couple's tax liability at bay.

Although there are financial advantages to filing separately, couples miss out on certain tax credits meant for couples who file jointly.

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.

Special Considerations

Married filing jointly offers the most tax savings, especially when the spouses have different income levels. This means if you use the married filing separately status, you are unable to take advantage of a number of potentially valuable tax breaks. Some important breaks include:

  • Child and Dependent Care Credit: This is a nonrefundable tax credit used by taxpayers to claim unreimbursed childcare expenses. Childcare can include fees paid for babysitters, day care, summer camps—provided they aren't overnight—and other care providers for children under the age of 13 or for anyone who cares for dependents who have a different ability.
  • Hope Credit: This nonrefundable credit is available to parents who file jointly and whose modified adjusted gross income (MAGI) is $160,000 or less. It allows a credit of $2,500 toward tuition of a student who has not yet completed four years of college. This credit was available for taxpayers filing up to the 2009 tax year.
  • American Opportunity Tax Credit (AOTC): Introduced in 2009, the AOTC also requires that couples filing jointly have a MAGI of no more than $160,000 for a full credit. Couples who make between $160,000 and $180,000 can apply for a partial ATOC, while those who make more than $180,000 do not qualify. Couples can save as much as $2,500 on qualified educational expenses for students who attend an approved post-secondary institution for the first four years.
  • Lifetime Learning Credits: Parents can lower their tax bills by claiming the amount spent on tuition on a dollar-for-dollar basis by as much as $2,000. Qualifying tuition includes undergraduate, graduate or professional degree courses. As of 2019, the income for couples filing jointly must not exceed $134,000.

As a couple who files joint tax returns, you can also as well as deductions for your contributions to a Traditional IRA and for any expenses related to the adoption of a qualifying child.

Benefits of Married 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 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.

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.