DEFINITION of '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.

BREAKING DOWN 'Married Filing Separately'

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.

Who could benefit from 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 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.

RELATED TERMS
  1. Married Filing Jointly

    Married filing jointly is a filing status for married couples ...
  2. Filing Status

    Filing status is a category that defines the type of tax return ...
  3. Total Tax

    The composite total of all taxes owed by a taxpayer for the year, ...
  4. Deduction

    A deduction is any item or expenditure subtracted from gross ...
  5. Schedule A

    Schedule A is a U.S. income tax form that is used by taxpayers ...
  6. Unlimited Marital Deduction

    The unlimited marital deduction is a provision that allows an ...
Related Articles
  1. Personal Finance

    Gay Marriage and Taxes: Everything You Should Know

    Same-sex couples now have a variety of tax strategies to consider.
  2. Financial Advisor

    Tax Time is Coming; Don't Be Caught Off Guard

    It's time to think about tax returns again. The good news is that the regulations in 2016 have not changed dramatically from last year.
  3. Personal Finance

    The Financial Pros and Cons of Getting Married

    Considering the financial benefits and challenges of getting married can help you make the decision that is best for you and your significant other.
  4. Taxes

    Ryan vs. Trump: How Their Tax Plans Differ

    Changes to the tax code are likely, but President-elect Trump and House Speaker Paul Ryan (D-Wis.) have yet to agree on which ones.
  5. Taxes

    Are You Really Eligible For The Earned Income Tax Credit?

    The amount of your earned income credit (EIC) is dependent upon how big your family is.
  6. Taxes

    Seven Deadly Sins to Avoid During Tax Season

    Make sure your tax return is error-free before filing with these seven tips.
  7. Taxes

    Do Your Research Before Claiming These Deductions

    Be sure to read the fine print about any deduction or credit that you’re planning to claim.
  8. Taxes

    How Obamacare Is Raising Your Taxes

    There are literally dozens of new, amended or broadened tax provisions under the Obamacare legislation. Find out how your taxes will be affected in the years to come.
  9. Taxes

    How To File A Canadian Tax Return

    The process for filing a Canadian tax return is easy and streamlined. Here is the information you need to know before filing.
  10. Taxes

    Why Do So Many People Fall Behind On Their Taxes?

    Despite the threat of owing thousands of dollars to possibly the most feared organization in the U.S., millions of Americans continue to fall behind on their taxes.
RELATED FAQS
  1. When am I considered "married" for tax purposes?

    You are generally considered married for tax purposes as long as you were married as of the last day of the year, regardless ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  2. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  3. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  4. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  5. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  6. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
Trading Center