A marital separation, if legally formalized, can affect what federal income tax deductions you qualify for. Although your marital status may qualify you for additional deductions, your eligibility to claim those deductions depends on your filing status and whether you actually paid the expenses you seek to deduct. The IRS treats separated taxpayers differently from divorced taxpayers.
Unlike divorced taxpayers, you may still file joint tax returns while separated if both spouses agree. You can also agree to file separately. If your separation is a prelude to divorce, the IRS will consider you single for the entire tax year as long as your divorce is finalized by December 31, in which case you must file as a single taxpayer. If your spouse did not live in your home during the last six months of the tax year, you paid more than half the cost of keeping up your home during the year and you had a qualifying dependent living with you for more than half the year, you might also qualify for single head of household status, possibly leading to a lower tax rate and higher standard deduction.
Exemptions are amounts you can deduct for yourself and your dependents. The value of the exemption increased to $3,800 for each dependent for the 2012 tax year. If you file jointly with your spouse, even while separated, your tax return may claim an exemption for each spouse. If you file separately, each spouse may claim himself or herself, and the custodial parent is entitled to the exemption for a qualifying child. The IRS considers the custodial parent to be the parent with whom the child lived most of the time during the tax year. If the child spent equal time living with each parent, the custodial parent is the parent with the higher adjusted gross income. The custodial parent can release the exemption to the noncustodial parent by filing Form 8332.
Medical Expense Deductions
You may deduct medical expenses you pay for yourself, your spouse and your dependents from your taxable income to the extent they exceed 7.5 percent of your adjusted gross income. The minimum threshold will increase to 10 percent for the 2013 tax year. As noted in IRS publication 502, when parents are separated, each one can claim the child as a dependent for the purposes of deducting medical expense that parent paid, so long as the child was in the custody of either or both the separated parents for more than half the tax year, and so long as the child received more than half her support from her parents.
Spousal and Child Support
If you pay alimony to your spouse under a court order, you can deduct the amount you pay as long as you don't file a joint tax return with your spouse, and as long as you don't live with your spouse at the time you make the payment. Child support payments, however, are not tax deductible. The spouse receiving alimony must report the amount on his tax return, but the spouse receiving child support payments doesn't need to report it as income. In this way, child support payments work a lot like tax deductions for the spouse who receives the payments.
Individual Retirement Arrangements
When you are married, the IRS generally allows you to contribute to your nonworking spouse's traditional IRA as long as you are working. If a separation decree is finalized during the tax year, however, you cannot deduct your contributions to your spouse's traditional IRA, but you can still deduct your contributions to your traditional IRA. If you lived with your spouse at any time during the tax year, either you or your spouse was covered by an employee retirement plan at work and you choose to file separately after your separation, you will not be able to deduct your IRA contributions unless your adjusted gross income is less than $10,000. Even taxpayers with adjusted gross incomes below $10,000 are entitled only to a partial deduction. Any excess IRA contributions are taxable.
- DivorceNet: Should We File Joint or Separate Tax Returns During a Divorce?
- Internal Revenue Service: Divorced or Separated Individuals
- FindLaw: Child Support and Taxes: Non-Custodial Parent FAQs
- Internal Revenue Service: Tax Tips for Non-Custodial Parents
- Internal Revenue Service: Alimony Paid
- USTaxCenter: Claiming Dependents and Exemptions
- IRS.gov: Publication 501
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.