The Married Filing Separately Tax Filing Status
Considerations for Married Taxpayers Who File Separate Tax Returns
Married taxpayers can file joint tax returns together, or they can file separate returns, but the "married filing separately" (MFS) status provides fewer tax benefits and is considered to be the least advantageous.
The income spans for tax brackets aren't as generous, you'll be disqualified from claiming several tax deductions and credits, and income phaseout limits for other deductions will be more prohibitive as well if you file separately. The flip side is that you won't be liable for taxes on the income your spouse earned and you can't be held legally responsible for any errors or omissions on your spouse's tax return.
A Division of Tax Liability
Both spouses are "jointly and severally liable" for the accuracy of a jointly filed tax return, and they're also jointly and severally liable for any resulting taxes on that return. This means the IRS can collect tax debts from each of them, and both are equally responsible for any errors or omissions on the return.
Filing separately might be an option if you're concerned about being responsible for a large tax bill resulting from income your spouse—not you—earned, or because you doubt the veracity or accuracy of a return they prepared. You might be on the verge of separating and you don't want to be tied together tax-wise for years to come.
An Example of Liability
You might prefer an MFS arrangement if your income is $20,000 while your spouse earns six figures. The IRS can and will take steps to collect from you if your spouse refuses to pay a $30,000 tax bill resulting from his income, even if that's more than you make in a year.
You're automatically responsible only paying the taxes due on income you personally earned if you file separately, or for the accuracy of your own tax return.
Some spouses just prefer to keep their finances as separate as possible.
The Effect on Tax Credits
Separately filing married taxpayers are prohibited from claiming several tax credits, including:
- Tuition and fees deduction
- Credit for the elderly and disabled
- Child and dependent care credit
- Earned income credit
- American Opportunity or Lifetime Learning educational credits
MFS taxpayers also have lower income phase-out ranges for the child tax credit.
The Effect on Deductions and Exclusions
Some tax deductions can become out of reach simply because both spouses must claim the standard deduction when they're filing separately, or they must both itemize their deductions unless one of them is eligible to file as head of household.
The income phase-out threshold for the IRA deduction is lower, and some other deductions and exclusions are off-limits for MFS filers, including:
- Student loan interest deduction
- Tax-free exclusion of U.S. bond interest
- Tax-free exclusion of Social Security benefits
That said, MFS status can be somewhat more beneficial for taxpayers who want to claim the itemized deductions with income threshold requirements. For example, the medical expense deduction is only available for the portion of your expenses that exceed 7.5% of your adjusted gross income (AGI) as of the 2019 tax year.
This can be a much lower threshold to meet on one income than on two combined incomes when you're filing jointly.
The Effect on Tax Rates
Your filing status also affects your tax rates. The following tax rates are in effect for those who are married but file separate returns in 2020 for the tax year 2019.
|10%||$0 to $9,700|
|12%||$9,701 to $39,475|
|22%||$39,476 to $84,200|
|24%||$84,201 to $160,725|
|32%||$160,726 to $204,100|
|35%||$204,101 to $306,175|
|37%||$306,176 or more|
These MFS brackets are the same as those that apply to single taxpayers...with one major exception. The 35% tax bracket covers income up to $510,300 for single taxpayers, but those who are married and file separately hit the highest tax bracket of 37% at incomes of just $306,175—a significant $200,000-plus difference.
The difference is even more pronounced if you file a joint return with your spouse. In this case, that 37% bracket doesn't kick in until incomes of $612,350 as of the 2019 tax year.
Spouses with incomes of $75,000 would find themselves in a 22% tax bracket if they filed separately, but just a 12% bracket if they filed a joint married return. That's a significant 10% difference.
No two taxpayers can claim the same dependent...unless they're married and filing a joint return. Married taxpayers who are parents and who file separately must decide which of them is going to claim their child as a dependent for various tax breaks.
Your kids don't have to be a package deal in this case. Each of you can claim one child if you have two children, or each of you could claim two or three if you have four children, leaving the other dependent for the other spouse. Otherwise, separately-filing parents can't "split" their dependents for various tax credits.
The IRS will award the dependent to the parent with whom the child lived most often during the tax year if the agency must decide the issue. It will give the dependent to the parent with the highest Adjusted Gross Income (AGI) by default if parents live together.
When You Must File a Separate Return
You have to file a separate return if your spouse is unwilling or unable to consent to file a joint return with you. Both of you must sign the return when you file jointly.
An exception to this rule exists when one spouse dies during the tax year. You can still file jointly for that year if you choose, but you can file separately as well without your spouse's consent.
When It Might Not Matter
Filing separately doesn't present any real drawback if the combined taxes that are due on two separate tax returns are the same as or very close to the tax that would be due on a joint return. You'll receive protection against liability, even if you don't have any particular reason to worry about that.
And an exception to liability exists if one spouse can prove a case for innocent spouse relief, establishing that they had no knowledge of the other's misstatement of tax information, so it would be unfair to hold them liable for any debt or penalties resulting from those misstatements.
Timing Your Decision
Married couples should decide whether to file either jointly or separately when they prepare their original tax return for the year, but they can change their minds and switch from two separate returns to a single joint return within three years from the due date of the original return, not counting any extensions.
They can change their minds and switch from a joint return to two separate returns only by the April 15 deadline for that tax year.
In either case, you must submit an amended tax return, Form 1040X, if you want to change your filing status after filing your tax return.
The Head of Household Option
You or your spouse—or perhaps both of you—might qualify for the head of household filing status if you're living apart and separated. This is much more advantageous than filing a separate married return, but it comes with a lot of qualifying rules.
You can't have lived together during the last six months of the year to qualify. Additionally, your home must have been the primary residence of at least one of your children for more than half the year, or the primary residence of another dependent for the entire year.
Some family members, such as your parents, don't have to live with you to qualify as your dependents, but you must have paid for more than half the cost of maintaining their household.
You must pay for more than half the cost of your household if your dependent lives with you.
You can claim the tax deductions and credits that would otherwise be unavailable to you if you're eligible to file as head of household rather than MFS.
Spouses in a Community Property State
Couples who reside in one of the nine community property states must follow special rules for allocating income and deductions when they file separately. The community property states are California, Arizona, New Mexico, Texas, Louisiana, Nevada, Idaho, Washington, and Wisconsin as of 2020.
Community property and income are considered to be jointly owned by both spouses. If your spouse earns $50,000, half of that is attributable to you regardless of whether you personally earned it. Each spouse must report half the total community property income on their separate tax return, even if you never worked a day all year.
Deductions are also split in half with each spouse reporting half the deduction on their separate returns. These rules apply even if just one spouse lives in a community property state, and it can obviously affect how much income you're responsible for reporting on a separate married return.
NOTE: Tax laws change periodically. You should always consult with a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and it is not a substitute for tax advice.
Taxpayer Advocate Service. "Know How Getting Married Changes Your Tax Situation." Accessed Feb. 11, 2020.
IRS. "Filing Status." Page 3. Accessed Feb. 12, 2020.
Tax Foundation. "2019 Tax Brackets." Accessed Feb. 12, 2020.
IRS. "Dependents." Page 5. Accessed Feb. 12, 2020.
IRS. "Signing the Return." Accessed Feb. 13, 2020.
IRS. "Publication 501 (2019), Dependents, Standard Deduction, and Filing Information." Accessed Feb. 12, 2020.
IRS. "Publication 555 (01/2019), Community Property." Accessed Feb. 12, 2020.