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

    A filing status for married couples that have wed before the ...
  2. Itemized Deduction

    Taking itemized deductions allows taxpayers who qualify to deduct ...
  3. Standard Deduction

    The IRS standard deduction is a portion of income that is not ...
  4. IRS Publication 501

    A document published by the Internal Revenue Service that covers ...
  5. IRS Publication 971: Innocent Spouse ...

    A document published by the Internal Revenue Service (IRS) that ...
  6. Form 8857: Request For Innocent ...

    An IRS tax form used by taxpayers to request relief from a tax ...
Related Articles
  1. Personal Finance

    Happily Married? File Taxes Separately!

    Just because you are in love doesn't mean that a joint return is best for both of you.
  2. Personal Finance

    The 10 Most Common Tax-Filing Mistakes

    Be sure to double check your federal income tax return for these common mistakes that could cost you time and money.
  3. Taxes

    How the GOP Tax Bill Affects You

    Here's how the new tax bill changes the taxes you file in 2018.
  4. Taxes

    How To Get The Most Money Back On Your Tax Return

    These tips will help you get a larger refund this year, while teaching you how to pay less taxes going forward.
  5. Taxes

    Anticipating Trump: How to Adjust Tax Planning Now

    President-elect Trump's proposed tax plan means your tax situation could change next year. What to do now.
  6. Tech

    Married with Money? Avoid These Costly Mistakes

    High net worth couples face more complex challenges than others when managing wealth. Try to avoid these easy-to-make errors.
  7. Taxes

    20 Tax Changes You Need To Know About

    Don't miss out on the tax changes. Here's a list that you need to know about.
  8. Taxes

    Calculating the Mortgage Interest Tax Deduction

    The amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.
  9. Taxes

    7 Tax Terms Explained

    As the tax season begins, there are certain words you need to know. Read on to see what they are.
  10. Taxes

    Tax Issues For Same-Sex Spouses

    The tax rules for same-sex spouses are largely the same as for traditional filers, but there are a few special considerations that apply.
Hot Definitions
  1. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  2. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  3. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  4. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  6. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
Trading Center