Married Filing Jointly vs Separately: Which Is Better?
Currently, married couples file jointly because they owe less tax that way and will receive a bigger refund. Their tax rate will be lower, and their standard deduction larger, than if they file separately.
The paperwork is also very straightforward. Most married couples, however, will have to use either Form 1040 or Form 1040SR, depending on circumstances.
What's the Difference Between Filing Jointly and Separately?
Couples should carefully consider why they want to file separately rather than file jointly. There are several reasons why a couple might choose to file their taxes separately.
Here's how the two filing statuses compare on the factors that matter most:
| Factor | Filing Jointly | Filing Separately |
|---|---|---|
| Standard deduction | Full amount | Half — and $0 if your spouse itemizes |
| EITC, Child & Dependent Care Credit, education credits | Available | Not available |
| Medical expense deduction threshold | 7.5% of combined AGI | 7.5% of each spouse's individual AGI |
| Rental loss deduction limit | Up to $25,000 | Up to $12,500 |
| Responsible for spouse's tax debt | Yes | No |
| Community property income-splitting (9 states) | Not applicable | Required |
These reasons could include divorce, uncertainty about whether one spouse is reporting all applicable income, a desire not to be held responsible for the other spouse's tax debts, excessive medical expenses incurred by one spouse, or specific situations where filing separately results in a larger refund compared to filing jointly.
Filing separately means giving up some of the most valuable tax breaks. If you file a separate return, you generally can't claim:
- The Earned Income Tax Credit (EITC) - Use the IRS EITC Assistant Tool to check if you are eligible for the Earned Income Tax Credit
- The Child and Dependent Care Credit
- Education credits like the American Opportunity Tax Credit and the Lifetime Learning Credit
- The student loan interest deduction
- The adoption credit, although exceptions may be applicable
- The adoption credit exclusion for employer adoption benefits, in most cases
- The exclusion for U.S. savings bond interest used to pay education expenses
Can You Take the Standard Deduction if Your Spouse Itemizes Deductions?
Couples should know that they cannot take the standard deduction if one of them itemizes deductions.
Couples who file separately and also have rental income can only deduct half of the standard amount that helps cover rental property losses, namely $12,500 instead of $25,000.
Which States Follow Community Property Laws
Couples who file separately may have their incomes treated as community income in the following states:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
IRS Publication 555 covers community income in detail. In short, the community property provision states that even though each spouse reports income earned on separate forms, each spouse must also report all income earned during the year in question while married.
When Does Filing Separately Make Sense?
When one spouse has a significant amount of unreimbursed out-of-pocket medical expenses, filing separately can sometimes actually help the couple to save money.
This is because the IRS allows you to deduct medical expenses only if they exceed 7.5% of your adjusted gross income (AGI). Therefore, if one of the filers has medical expenses that exceed 7.5% of their AGI but the couple's combined medical expenses do not exceed 7.5%, filing separately may be beneficial to claim this deduction.
Filing separately might also be a better option when one spouse owes back taxes to the IRS.
If the spouses file jointly, the spouse without the debt becomes responsible for what their significant other owes. Therefore, if they would otherwise be due a tax refund, filing jointly would cause the refund to be applied to the other spouse's debt.
Can Same Sex Couples File Jointly?
If a same-sex couple was married in a jurisdiction that allows such marriages, that couple can file jointly even if the jurisdiction where they currently live does not recognize their marriage.
The law also covers both domestic entities that are not states, such as United States territories, and foreign countries that sanction same-sex marriages. The stipulation for common-law couples is similar. The only difference is that the state where they now reside must recognize common-law marriages.
Can a Return That has Already Been Filed Be Changed From One Type to Another?
In short, yes. Couples who wish to change from separate to joint may file Form 1040X within a period of three years from the original date of filing. Couples switching from filing separately to jointly, such as when one spouse dies during the year, have 1 year to file the amended return, as stipulated in Publication 559.
Can You File as Head of Household if You File Separately?
If one spouse files separately, that person has the option of being the "head of household." To qualify for this option, that person must pay more than or equal to half the upkeep of the home in question, be unmarried on December 31 of the year in question, be living with someone who is not his or her parent for 183 or more days during the year in question or be responsible for a dependent parent, live-in or not.
To be considered unmarried for filing as "head of household," the person must meet all of the following criteria in addition to the criteria for filing "head of household" in the first place.
The person's spouse must not have lived with the filer for more than 182 days in the year in question; the person's child, or children, must live with the person; and the person must be eligible to claim the child, or children, as a tax exemption, or exemptions.
Note that the person might not have to claim the child, or children, as exemptions if the noncustodial parent has already claimed them as exemptions on another return. Anyone married to a foreign national who is a nonresident alien cannot claim that spouse as a qualifying person to file as "head of household" and would need another qualifying person.
Choosing to recognize one's spouse as a resident alien classifies a taxpayer as married, which means "head of household" is no longer applicable. People file as "head of household" when they qualify because they're allowed greater exemptions and will receive a larger return than if they file as single or married filing separately.