Married Filing Separately

The IRS generally rewards married couples to elect to use the filing status “Married Filing Jointly.”

Married filing separately has a number of special rules:

After filing jointly, the two spouse have committed to keep that election for that tax year, except in the case where one or both of the spouse has died and the personal representative (executor) then files a separate return within one year after the extended due date.

After one or both spouses have filed separately, the two spouse have three years after the extended due date to change their mind, and they may agree to amend and file as married filing jointly.

Itemized deductions rules. see IRS Q&A

  • If the first spouse to file elects to itemize deductions on Schedule A, then then both spouses must itemize deductions.

  • If the first spouse to file takes the standard deduction, then then both spouses must take the standard deduction.
    Exception: regardless, if a spouse files Head of Household (HOH), that spouse may take the higher HOH standard deduction leaving the other spouse free to itemize or to take the standard deduction.

  • To file HOH the spouses must live apart for the last six months of the year; the spouse pays over 50% of the cost of the home which is the main home of a child for more than 50% of the year or another home for a parent; and that child is claimed as a dependent by either spouse.

One spouse may claim the other spouse as an exemption under certain conditions, including not having filed his or her own separate tax return.

 

The Earned Income Credit (EIC) is not allowed for either spouse, except if filing HOH.

The Elderly or Disabled Care Credit is not allowed for either spouse, unless both spouses lived apart all year.
The Child and Dependent Care Credit is not allowed for either spouse, in most cases, except if filing HOH.
The Adoption Expense Credit or Exclusion is not allowed for either spouse, in most cases.

The Education Credits are not allowed for either spouse.
The Tuition and Fees Deduction is not allowed for either spouse.
The Student Loan Interest deduction is not allowed for either spouse.
The Education benefit of excluding interest income from certain U.S. Bonds is not allowed for either spouse.

Contributions to an IRA are phased out at $10,000, unless both spouses lived apart all year.

Social Security income is fully taxable for each spouse, unless both spouses lived apart all year.

Rental Real Estate losses is limited if living apart and they are denied if living together.

Premium Tax Credit (PTC) and Advance payments of the Premium Tax Credit (APTC) are generally prohibited.

Community Property States have additional issues to contend with when married filing separately.  see IRS page

Wages and withholding taxes are split evenly, regardless of which spouse’s name is on the W-2.
Self-employment income or loss are split evenly, regardless of which spouse operates the business.
Self-employment income tax is paid by the active spouse that operates the business.

Active participation in partnership income or loss is split evenly.
Passive investment in partnership income stays separately for each spouse.

Deductions/Expenses are split evenly if paid from community funds, otherwise if paid from separate funds, they are deducted separately by each spouse.

Couples who are separated and awaiting a final divorce decree have special rules that vary by State.

Other special rules apply if:

  • Spouses lived apart for the entire year.
  • In some states the spouses may agree to change community property and community income to separate property & separate income.
  • The first spouse to file treating an item as separate income, and does not notify the other spouse, then the first filing spouse is responsible for reporting all of the income.
  • Innocent spouse relief (joint and several liability) and injured spouse relief (your share of a refund) have special provisions too.

Same-sex marriages are generally treated the same as man-woman marriages.  see IRS-FAQ
But Registered Domestic Partners (RDP) are treated as being single or HOH.  see IRS-FAQ

Qualifying Widow(er) is a special status for the two years following the year of death of one spouse, if the surviving spouse remains unmarried, and lives with a child who is claimed as a dependent, and was allowed to file jointly with the decedent spouse for the year of death.