When tax time rolls around, married couples can choose two different ways of filing their taxes: joint tax returns or married filing separately returns. It is important to recognize and consider all the pros and cons of each type when deciding how to file.
Married couples can decide to file tax returns separately. This type of filing status does not receive all the benefits of filing jointly for married people, so it is hardly ever used.
People who file jointly have many benefits that separate filers do not, such as:
- Earned income credit
- Tuition deductions
- Child and dependent care credits
- Interest on student loan deductions
- U.S. bond interest exclusions
- Social Security benefit exclusions
- Elder and disability care credits
Married couples who file separately must fall into more stringent income ranges in order to get the IRA deduction.
Even if you file separately from your spouse, there are still rules that make you filed in the same way. If one of you takes the standard deduction, the other must as well. This also works with itemized deductions. Spouses cannot take both standard and itemized deductions even when filing separately.
Table of Contents
What is the Benefit to File Taxes Separately?
With all of those negative results of separate tax filing, it may seem like it is a bad idea all the time. The main reason and married couples do file separately is that their tax liabilities are separate.
While it seems like an unpleasant prospect, if you suspect your spouse is evading the taxes or not claiming everything correctly, filing a separate tax return makes sense. This will protect you financially and separate you from any legal proceedings that he may incur. You will also not be involved in any audits.
Can You File Head of Household if Married and Filing Separately?
It is possible for a married person to file as head of household if they meet the following criteria. One, if you and your spouse did not live together during the last six months of the previous tax year. Two, you provided more than half of the care for a child or other qualifying person who lived with you for more than six months.
Community Property States
In community property states, all property the spouses own is considered jointly owned by both of them. For tax purposes, this means that each spouse must report half of the total communal income if they file separate tax returns. Only half of any deductions for community property can be reported on each return.
Mutual Consent Needed for Joint Filing
Even if one spouse wants to file a joint tax return, they cannot do so if the other spouse is unwilling or unable to sign the joint return. Filing married but separate is necessary in cases like this.
When Should You Decide to File Joint or Separate Returns?
The best time to decide which way you are going to file is the first time you sit down to do taxes in a particular tax year. It is important to file either a joint or two separate tax returns by the April 15th deadline.
Remember, when you file with TurboTax Online, we’ll ask you simple questions about your situation and recommend the best filing status, credits and deductions that will get you the biggest refund.