IRS Rules for Married Filing Separately

Under the Internal Revenue Code, five filing statuses are possible, including "married filing jointly" and "married filing separately." Married taxpayers may choose to file either jointly or separately. The choice of filing status affects many aspects of your tax return, including eligibility for tax breaks. While many couples benefit from filing jointly, under certain circumstances it is advantageous to file separately.

Tax Brackets

When you file jointly, you must add together your incomes to determine your tax bracket. For this reason, filing jointly can put you into a higher tax bracket. Although Congress enacted legislation in 2003 to partially alleviate this "marriage penalty," you can avoid it altogether by filing separately.

Liability

If you file jointly with your spouse and your spouse prepares your return, you can be held jointly liable for any underpayment, plus penalties and interest, if your spouse commits fraud or makes an error. Joint liability means that if one spouse can't pay, the IRS can get all of the money from the other spouse. By filing separately, you eliminate this liability.

Deduction Limits

Certain tax deductions are available only if they exceed a certain percentage of your adjusted gross income, or AGI. The medical and dental expense deduction, for example, applies only to expenses that exceed 7.5 percent of your AGI, while you can deduct investment expenses only to the extent that they exceed 2 percent of your AGI. If you file separately, it may be easier for you to meet this threshold, particularly if your expenses connected to a particular deduction are higher than your spouse's, and your AGI is significantly less than your spouse's.

Forfeited Tax Breaks

If your filing status is married filing separately, you are ineligible to claim certain tax breaks, such as the child and dependent care credit, the tuition and fees deduction, the American opportunity credit, the student loan interest deduction and the earned income credit. This prohibition applies to both spouses. Tax credits are even more valuable than tax deductions, because the amounts are deducted from your total tax due rather than from your taxable income.

Community Property

If you are married, how much of your joint income belongs to you depends on state law. Although community property law is complex, in community property states roughly half of your joint income belongs to you, regardless of how much you make. As of 2012, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are community property states.

Dependent Exemptions

Most parents of minor children can claim their children as exemptions. In addition, certain other relatives qualify, depending on how much financial support you provide and whether they live with you or not. As of 2012, the dependent exemption is worth $3,800 per dependent. If you are filing separately, only one spouse can claim the dependent exemption with respect to any particular dependent. If you are filing separately because of a marital separation, the parent with whom the child lived with the most during the tax year is usually the only one entitled to claim the exemption. Under certain circumstances, however, one parent is entitled to voluntarily assign the dependent exemption to the other parent.

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About the Author

David Carnes has been a full-time writer since 1998 and has published two full-length novels. He spends much of his time in various Asian countries and is fluent in Mandarin Chinese. He earned a Juris Doctorate from the University of Kentucky College of Law.

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