Finances

Filing Taxes as a Married Couple Living Separately: What You Need to Know

Nash Riggins

|

June 6, 2023

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

Couple sitting down looking at computer with a calculator and a piece of paper

The intelligent digital vault for families

Trustworthy protects and optimizes important family information so you can save time, money, and enjoy peace of mind

Tax season can be complicated at the best of times. But marriage can add an extra layer to those complications — especially if you and your spouse live apart.

Maybe you and your husband or wife are estranged but not divorced. Or, you might still be together but just live in different homes or cities.

No matter what your situation is, there are a couple of different filing options available to couples that live separately. 

In this guide, we’ll walk you through the different IRS filing statuses available to married couples living separately and the different deductions and tax credits that may be available to you.

Key Takeaways

  • Married couples living separately can file taxes using three statuses: Married Filing Jointly (MFJ), Married Filing Separately (MFS), or Head of Household with a Qualifying Person.

  • Filing jointly lets you benefit from a wider range of tax credits and a higher level of deductions.

  • By using the Head of Household status, you’ll benefit from a lower tax rate and higher Standard Deduction — but the eligibility around this status can be complicated.

What are the Different Filing Options Available to Married Couples Living Separately?

If you and your spouse are separated but still legally married, there are three main filing routes that your financial advisor will probably recommend to you.

Those options are:

  • Married Filing Jointly (MFJ)

  • Married Filing Separately (MFS)

  • Head of Household with a Qualifying Person

It’s worth noting that there are other tax statuses that the IRS observes. These are “Single” and “Qualifying Widow(er) with a Dependent Child”. But if you’re still married, you can’t file as Single — even if you’re estranged from your husband or wife.

The filing status that you choose to go for might depend on a few different factors. 

For example, you’re going to benefit from more tax breaks if you choose the MFJ status. But if you’re not on great terms with your spouse and you don’t want to complicate things, you might be willing to sacrifice those benefits by going with the MFS status.

The Head of Household status can be even more complicated, and you’ll probably need an accountant’s help to file this way — but you’ll benefit from some larger deductions by putting up with the hassle.

To help you understand the difference between each of these three filing methods and how to decide between them, let’s quickly break down the eligibility requirements, pros, and cons of each filing status.

What is the Difference Between Married Filing Jointly and Married Filing Separately?

“When married couples choose to live apart, they usually have two tax filing options: married filing jointly or married filing separately,” explains Michael Hammelburger, certified financial advisor and CEO The Bottom Line Group, a cost segregation firm based in

Baltimore.

“Married couples filing jointly can combine their income and deductions on a single tax return, potentially resulting in lower overall taxes. Married filing separately, on the other hand, entails each spouse filing their own tax return, reporting their individual income and deductions.”

Translation: filing jointly is probably going to be cheaper, but filing separately might be easier. That being said, the benefits of each filing status are a tiny bit more nuanced than that. Let’s take a look.

What are the Benefits of Using the Married Filing Jointly (MFJ) Status?

If you’re married, it generally makes more sense to file jointly. That’s because the IRS reserves a number of tax credits for married couples. The most popular tax credits married filers will benefit from include:

  • The Earned Income Tax Credit

  • The Child and Dependent Care Tax Credit

  • The American Opportunity Tax Credit

  • The Lifetime Learning Education Tax Credit

With the Earned Income Tax Credit alone, you can claim up to $24,210 when filing jointly — or up to $63,698 if you and your spouse have three kids.

By contrast, you can only claim $17,640 if you’re childless and filing on your own (or $56,838 if you’ve got three children).

Likewise, MFJ taxpayers will qualify to write off up to $2,100 worth of childcare expenses as part of the Child and Dependent Care Tax Credit, up to $2,500 per person thanks to the American Opportunity Tax Credit, and $2,000 thanks to the Lifetime Learning Tax Credit.

You’ll also benefit from a Student Loan Interest Deduction — not to mention a higher level of deductions overall.

For 2023, the standard deduction for a couple filing jointly was $27,700. By contrast, you’ll only get to deduct up to $13,850 if you are Married Filing Separately or you're single.

That being said, The Bottom Line Group’s Michael Hammelburger does point out there are some situations in which the MFJ status might make things a bit awkward or more difficult for married couples that have separated.

“The Married Filing Jointly (MFJ) status has several advantages. It also simplifies and streamlines tax preparation by requiring only one tax return,” he says. 

“However, there may be some drawbacks. Because both spouses are jointly liable for any taxes owed, one spouse's financial problems or mistakes can affect the other. Furthermore, combining incomes may result in a higher overall tax bracket and the loss of certain deductions or credits.”

In short: when you file using the MFJ status, both you and your spouse are responsible for all tax, penalties, and interest owed. 

As a result, you need to communicate effectively with one another and make sure you’re sharing all the correct documentation with one another (and your accountant).

It’s also important to note that if your spouse doesn’t pay the tax they owe, you might end up getting stuck with the tax bill.

That means if you and your spouse aren’t on great terms, MFJ might be more trouble than it’s worth in the long run.

What are the Benefits of Using the Married Filing Separately (MFS) Status? 

If you’re living separately from your spouse but you’re still legally married, you may also want to consider the MFS status. 

This status is often used when you’ve been living apart from your husband or wife for an extended amount of time, and it can offer estranged couples some peace of mind in knowing they’re both responsible for their own tax affairs.

If you don’t have faith in your spouse’s record-keeping or you don’t want to end up sharing a tax bill and any associated penalties, MFS is often the safer option.

But according to Katrina L. Martin, an Enrolled Agent and Certified Tax Coach at Wow Tax & Advisory Service, filing separately isn’t just a smart idea because it helps you protect your finances.

“Typically, couples who file Married Filing Jointly receive more tax breaks, but sometimes it might be a good idea to consider filing a married filing separate tax return,” she explains.

If a spouse has outstanding child support payments, filing separately would prevent the IRS from taking the other spouse's portion of any refund.

Likewise, MFS can also be a beneficial route if a couple’s joint income is too high to qualify for the Medical Expense Deduction. As a point of reference, medical expenses you claim need to be more than 10% of your adjusted gross income (AGI) to use the deduction.

By using the Married Filing Separately status, one spouse could qualify to deduct their medical expenses. So if you and your spouse have had big medical expenses in the most recent tax year, MFS will enable you to make those medical expenses as itemized deductions.

When Does it Make Sense to File Using the Head of Household Status?

Generally speaking, the two most common ways for married couples living separately to file their tax returns are to use the MFJ or MFS status. But if you’d like to file individually and are looking for bigger tax breaks than the MFS status can offer, there is one alternative.

“In certain circumstances some married taxpayers who lived apart from their spouse during the last six months of the year and provided for dependent children may be ‘considered unmarried’ and qualify to file as Head of Household,” says Wow Tax & Advisory Service’s Katrina L. Martin.

The Head of Household filing status enables parents who provide more than half the cost of upkeep for qualifying dependents to claim a bigger Standard Deduction

In 2022, the Standard Deduction for this status was capped at $19,400. If you were using the MFS status, your cap would have been sitting at $12,950.

They also get taxed at lower rates than those filing to the IRS using an MFS or MFJ status.

For example, single filers in 2022 had to pay a 12% tax rate on any taxable income between $10,275 and $41,775. Anything above that cap was taxed at 22%.

But if you use the Head of Household status to file your return, that same 12% rate is applied for income from $14,650 to $55,900.

That means if you had $50,000 worth of taxable income in 2022, you’d save more than $900 worth of income taxes by choosing to file as a Head of Household rather than filing as an individual.

Although this sounds like a great way to file, it’s pretty hard to qualify for the Head of Household status.

The IRS will only let you file as a Head of Household if you’re married and:

  • You and your spouse didn’t live in the same home for the last six months of the tax year

  • You paid over half the costs of keeping your home and taking care of any dependents

  • Your home was the main residence for more than half the tax year of an eligible dependent

  • You can claim the exemption for relevant dependents

To qualify for this status, all of these criteria must be met — and for reference, the IRS counts a “dependent” as a child, stepchild, or foster child.

Where exemptions are concerned, it’s worth noting there’s one exception. If the noncustodial parent to your dependent is claiming the child under rules for separated parents, you’ll normally still qualify for the Head of Household status.

What do Married Couples Living Separately Need to Know About Filing Taxes?

It doesn’t matter whether you’re estranged from your spouse or simply in a long-distance relationship. When tax season rolls around, you’ll need to make a choice about how the two of you will be filing — and there are several considerations you need to bear in mind.

“When filing their taxes, separated couples must first determine their filing status, whether Married Filing Jointly (MFJ) or Married Filing Separately (MFS), and weigh the tax implications of each option,” says The Bottom Line Group’s Michael Hammelburger.

To ensure accurate reporting of income, deductions, and credits, it is critical to communicate and coordinate with the estranged spouse. They should also discuss the allocation of joint expenses such as mortgage interest and property taxes.”

Likewise, you’ll need to ensure that any legal agreements or court orders surrounding financial responsibilities or support payments are kept on file and accessible to all parties — including any financial professionals the two of you may be working with.

That level of organization and communication can be incredibly complicated between multiple parties when you’re living separately and trying to hit a filing deadline. That’s where a Family Operating System® like Trustworthy can make life a lot simpler.

Trustworthy enables you to store digital copies of all your records in a fully secure, cloud-based digital safe. That includes everything from IDs and tax information to estate documents, insurance documents, property deeds, and everything in between.

You can then invite collaborators like your accountant or financial planner to log in and securely access the documents they need to get your taxes (and everything else) in order.

Ready to find out more? Take a look at Trustyworthy’s wide range of features and get started now.

Frequently Asked Questions

Do the Same Tax Credits Apply to Couples Regardless of Whether They're Filing Jointly or Separately?

No. Couples can generally claim a wider range of tax credits when filing jointly. Using the Married Filing Jointly (MFJ) status also lets you claim higher deductions — helping you bring down your overall tax liability.

What are the Disadvantages of Filing Separately?

The biggest disadvantage is that you won’t be able to claim as many tax credits. By using the Married Filing Single (MFS) status, you’re missing out on the Earned Income Tax Credit, Adoption Credit, and American Opportunity Tax Credit.

What are the Cons of Married Filing Jointly (MFJ)?

The biggest disadvantage of using the MFJ status is that you and your spouse will share responsibility for any tax, interest, and penalties owed. If you’re estranged, these shared responsibilities could lead to issues.

Finances

Filing Taxes as a Married Couple Living Separately: What You Need to Know

Nash Riggins

|

June 6, 2023

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

Tax season can be complicated at the best of times. But marriage can add an extra layer to those complications — especially if you and your spouse live apart.

Maybe you and your husband or wife are estranged but not divorced. Or, you might still be together but just live in different homes or cities.

No matter what your situation is, there are a couple of different filing options available to couples that live separately. 

In this guide, we’ll walk you through the different IRS filing statuses available to married couples living separately and the different deductions and tax credits that may be available to you.

Key Takeaways

  • Married couples living separately can file taxes using three statuses: Married Filing Jointly (MFJ), Married Filing Separately (MFS), or Head of Household with a Qualifying Person.

  • Filing jointly lets you benefit from a wider range of tax credits and a higher level of deductions.

  • By using the Head of Household status, you’ll benefit from a lower tax rate and higher Standard Deduction — but the eligibility around this status can be complicated.

What are the Different Filing Options Available to Married Couples Living Separately?

If you and your spouse are separated but still legally married, there are three main filing routes that your financial advisor will probably recommend to you.

Those options are:

  • Married Filing Jointly (MFJ)

  • Married Filing Separately (MFS)

  • Head of Household with a Qualifying Person

It’s worth noting that there are other tax statuses that the IRS observes. These are “Single” and “Qualifying Widow(er) with a Dependent Child”. But if you’re still married, you can’t file as Single — even if you’re estranged from your husband or wife.

The filing status that you choose to go for might depend on a few different factors. 

For example, you’re going to benefit from more tax breaks if you choose the MFJ status. But if you’re not on great terms with your spouse and you don’t want to complicate things, you might be willing to sacrifice those benefits by going with the MFS status.

The Head of Household status can be even more complicated, and you’ll probably need an accountant’s help to file this way — but you’ll benefit from some larger deductions by putting up with the hassle.

To help you understand the difference between each of these three filing methods and how to decide between them, let’s quickly break down the eligibility requirements, pros, and cons of each filing status.

What is the Difference Between Married Filing Jointly and Married Filing Separately?

“When married couples choose to live apart, they usually have two tax filing options: married filing jointly or married filing separately,” explains Michael Hammelburger, certified financial advisor and CEO The Bottom Line Group, a cost segregation firm based in

Baltimore.

“Married couples filing jointly can combine their income and deductions on a single tax return, potentially resulting in lower overall taxes. Married filing separately, on the other hand, entails each spouse filing their own tax return, reporting their individual income and deductions.”

Translation: filing jointly is probably going to be cheaper, but filing separately might be easier. That being said, the benefits of each filing status are a tiny bit more nuanced than that. Let’s take a look.

What are the Benefits of Using the Married Filing Jointly (MFJ) Status?

If you’re married, it generally makes more sense to file jointly. That’s because the IRS reserves a number of tax credits for married couples. The most popular tax credits married filers will benefit from include:

  • The Earned Income Tax Credit

  • The Child and Dependent Care Tax Credit

  • The American Opportunity Tax Credit

  • The Lifetime Learning Education Tax Credit

With the Earned Income Tax Credit alone, you can claim up to $24,210 when filing jointly — or up to $63,698 if you and your spouse have three kids.

By contrast, you can only claim $17,640 if you’re childless and filing on your own (or $56,838 if you’ve got three children).

Likewise, MFJ taxpayers will qualify to write off up to $2,100 worth of childcare expenses as part of the Child and Dependent Care Tax Credit, up to $2,500 per person thanks to the American Opportunity Tax Credit, and $2,000 thanks to the Lifetime Learning Tax Credit.

You’ll also benefit from a Student Loan Interest Deduction — not to mention a higher level of deductions overall.

For 2023, the standard deduction for a couple filing jointly was $27,700. By contrast, you’ll only get to deduct up to $13,850 if you are Married Filing Separately or you're single.

That being said, The Bottom Line Group’s Michael Hammelburger does point out there are some situations in which the MFJ status might make things a bit awkward or more difficult for married couples that have separated.

“The Married Filing Jointly (MFJ) status has several advantages. It also simplifies and streamlines tax preparation by requiring only one tax return,” he says. 

“However, there may be some drawbacks. Because both spouses are jointly liable for any taxes owed, one spouse's financial problems or mistakes can affect the other. Furthermore, combining incomes may result in a higher overall tax bracket and the loss of certain deductions or credits.”

In short: when you file using the MFJ status, both you and your spouse are responsible for all tax, penalties, and interest owed. 

As a result, you need to communicate effectively with one another and make sure you’re sharing all the correct documentation with one another (and your accountant).

It’s also important to note that if your spouse doesn’t pay the tax they owe, you might end up getting stuck with the tax bill.

That means if you and your spouse aren’t on great terms, MFJ might be more trouble than it’s worth in the long run.

What are the Benefits of Using the Married Filing Separately (MFS) Status? 

If you’re living separately from your spouse but you’re still legally married, you may also want to consider the MFS status. 

This status is often used when you’ve been living apart from your husband or wife for an extended amount of time, and it can offer estranged couples some peace of mind in knowing they’re both responsible for their own tax affairs.

If you don’t have faith in your spouse’s record-keeping or you don’t want to end up sharing a tax bill and any associated penalties, MFS is often the safer option.

But according to Katrina L. Martin, an Enrolled Agent and Certified Tax Coach at Wow Tax & Advisory Service, filing separately isn’t just a smart idea because it helps you protect your finances.

“Typically, couples who file Married Filing Jointly receive more tax breaks, but sometimes it might be a good idea to consider filing a married filing separate tax return,” she explains.

If a spouse has outstanding child support payments, filing separately would prevent the IRS from taking the other spouse's portion of any refund.

Likewise, MFS can also be a beneficial route if a couple’s joint income is too high to qualify for the Medical Expense Deduction. As a point of reference, medical expenses you claim need to be more than 10% of your adjusted gross income (AGI) to use the deduction.

By using the Married Filing Separately status, one spouse could qualify to deduct their medical expenses. So if you and your spouse have had big medical expenses in the most recent tax year, MFS will enable you to make those medical expenses as itemized deductions.

When Does it Make Sense to File Using the Head of Household Status?

Generally speaking, the two most common ways for married couples living separately to file their tax returns are to use the MFJ or MFS status. But if you’d like to file individually and are looking for bigger tax breaks than the MFS status can offer, there is one alternative.

“In certain circumstances some married taxpayers who lived apart from their spouse during the last six months of the year and provided for dependent children may be ‘considered unmarried’ and qualify to file as Head of Household,” says Wow Tax & Advisory Service’s Katrina L. Martin.

The Head of Household filing status enables parents who provide more than half the cost of upkeep for qualifying dependents to claim a bigger Standard Deduction

In 2022, the Standard Deduction for this status was capped at $19,400. If you were using the MFS status, your cap would have been sitting at $12,950.

They also get taxed at lower rates than those filing to the IRS using an MFS or MFJ status.

For example, single filers in 2022 had to pay a 12% tax rate on any taxable income between $10,275 and $41,775. Anything above that cap was taxed at 22%.

But if you use the Head of Household status to file your return, that same 12% rate is applied for income from $14,650 to $55,900.

That means if you had $50,000 worth of taxable income in 2022, you’d save more than $900 worth of income taxes by choosing to file as a Head of Household rather than filing as an individual.

Although this sounds like a great way to file, it’s pretty hard to qualify for the Head of Household status.

The IRS will only let you file as a Head of Household if you’re married and:

  • You and your spouse didn’t live in the same home for the last six months of the tax year

  • You paid over half the costs of keeping your home and taking care of any dependents

  • Your home was the main residence for more than half the tax year of an eligible dependent

  • You can claim the exemption for relevant dependents

To qualify for this status, all of these criteria must be met — and for reference, the IRS counts a “dependent” as a child, stepchild, or foster child.

Where exemptions are concerned, it’s worth noting there’s one exception. If the noncustodial parent to your dependent is claiming the child under rules for separated parents, you’ll normally still qualify for the Head of Household status.

What do Married Couples Living Separately Need to Know About Filing Taxes?

It doesn’t matter whether you’re estranged from your spouse or simply in a long-distance relationship. When tax season rolls around, you’ll need to make a choice about how the two of you will be filing — and there are several considerations you need to bear in mind.

“When filing their taxes, separated couples must first determine their filing status, whether Married Filing Jointly (MFJ) or Married Filing Separately (MFS), and weigh the tax implications of each option,” says The Bottom Line Group’s Michael Hammelburger.

To ensure accurate reporting of income, deductions, and credits, it is critical to communicate and coordinate with the estranged spouse. They should also discuss the allocation of joint expenses such as mortgage interest and property taxes.”

Likewise, you’ll need to ensure that any legal agreements or court orders surrounding financial responsibilities or support payments are kept on file and accessible to all parties — including any financial professionals the two of you may be working with.

That level of organization and communication can be incredibly complicated between multiple parties when you’re living separately and trying to hit a filing deadline. That’s where a Family Operating System® like Trustworthy can make life a lot simpler.

Trustworthy enables you to store digital copies of all your records in a fully secure, cloud-based digital safe. That includes everything from IDs and tax information to estate documents, insurance documents, property deeds, and everything in between.

You can then invite collaborators like your accountant or financial planner to log in and securely access the documents they need to get your taxes (and everything else) in order.

Ready to find out more? Take a look at Trustyworthy’s wide range of features and get started now.

Frequently Asked Questions

Do the Same Tax Credits Apply to Couples Regardless of Whether They're Filing Jointly or Separately?

No. Couples can generally claim a wider range of tax credits when filing jointly. Using the Married Filing Jointly (MFJ) status also lets you claim higher deductions — helping you bring down your overall tax liability.

What are the Disadvantages of Filing Separately?

The biggest disadvantage is that you won’t be able to claim as many tax credits. By using the Married Filing Single (MFS) status, you’re missing out on the Earned Income Tax Credit, Adoption Credit, and American Opportunity Tax Credit.

What are the Cons of Married Filing Jointly (MFJ)?

The biggest disadvantage of using the MFJ status is that you and your spouse will share responsibility for any tax, interest, and penalties owed. If you’re estranged, these shared responsibilities could lead to issues.

Finances

Filing Taxes as a Married Couple Living Separately: What You Need to Know

Nash Riggins

|

June 6, 2023

Trustworthy is an intelligent digital vault that protects and optimizes your family's information so that you can save time, money, and enjoy peace of mind.

Couple sitting down looking at computer with a calculator and a piece of paper

The intelligent digital vault for families

Trustworthy protects and optimizes important family information so you can save time, money, and enjoy peace of mind

Tax season can be complicated at the best of times. But marriage can add an extra layer to those complications — especially if you and your spouse live apart.

Maybe you and your husband or wife are estranged but not divorced. Or, you might still be together but just live in different homes or cities.

No matter what your situation is, there are a couple of different filing options available to couples that live separately. 

In this guide, we’ll walk you through the different IRS filing statuses available to married couples living separately and the different deductions and tax credits that may be available to you.

Key Takeaways

  • Married couples living separately can file taxes using three statuses: Married Filing Jointly (MFJ), Married Filing Separately (MFS), or Head of Household with a Qualifying Person.

  • Filing jointly lets you benefit from a wider range of tax credits and a higher level of deductions.

  • By using the Head of Household status, you’ll benefit from a lower tax rate and higher Standard Deduction — but the eligibility around this status can be complicated.

What are the Different Filing Options Available to Married Couples Living Separately?

If you and your spouse are separated but still legally married, there are three main filing routes that your financial advisor will probably recommend to you.

Those options are:

  • Married Filing Jointly (MFJ)

  • Married Filing Separately (MFS)

  • Head of Household with a Qualifying Person

It’s worth noting that there are other tax statuses that the IRS observes. These are “Single” and “Qualifying Widow(er) with a Dependent Child”. But if you’re still married, you can’t file as Single — even if you’re estranged from your husband or wife.

The filing status that you choose to go for might depend on a few different factors. 

For example, you’re going to benefit from more tax breaks if you choose the MFJ status. But if you’re not on great terms with your spouse and you don’t want to complicate things, you might be willing to sacrifice those benefits by going with the MFS status.

The Head of Household status can be even more complicated, and you’ll probably need an accountant’s help to file this way — but you’ll benefit from some larger deductions by putting up with the hassle.

To help you understand the difference between each of these three filing methods and how to decide between them, let’s quickly break down the eligibility requirements, pros, and cons of each filing status.

What is the Difference Between Married Filing Jointly and Married Filing Separately?

“When married couples choose to live apart, they usually have two tax filing options: married filing jointly or married filing separately,” explains Michael Hammelburger, certified financial advisor and CEO The Bottom Line Group, a cost segregation firm based in

Baltimore.

“Married couples filing jointly can combine their income and deductions on a single tax return, potentially resulting in lower overall taxes. Married filing separately, on the other hand, entails each spouse filing their own tax return, reporting their individual income and deductions.”

Translation: filing jointly is probably going to be cheaper, but filing separately might be easier. That being said, the benefits of each filing status are a tiny bit more nuanced than that. Let’s take a look.

What are the Benefits of Using the Married Filing Jointly (MFJ) Status?

If you’re married, it generally makes more sense to file jointly. That’s because the IRS reserves a number of tax credits for married couples. The most popular tax credits married filers will benefit from include:

  • The Earned Income Tax Credit

  • The Child and Dependent Care Tax Credit

  • The American Opportunity Tax Credit

  • The Lifetime Learning Education Tax Credit

With the Earned Income Tax Credit alone, you can claim up to $24,210 when filing jointly — or up to $63,698 if you and your spouse have three kids.

By contrast, you can only claim $17,640 if you’re childless and filing on your own (or $56,838 if you’ve got three children).

Likewise, MFJ taxpayers will qualify to write off up to $2,100 worth of childcare expenses as part of the Child and Dependent Care Tax Credit, up to $2,500 per person thanks to the American Opportunity Tax Credit, and $2,000 thanks to the Lifetime Learning Tax Credit.

You’ll also benefit from a Student Loan Interest Deduction — not to mention a higher level of deductions overall.

For 2023, the standard deduction for a couple filing jointly was $27,700. By contrast, you’ll only get to deduct up to $13,850 if you are Married Filing Separately or you're single.

That being said, The Bottom Line Group’s Michael Hammelburger does point out there are some situations in which the MFJ status might make things a bit awkward or more difficult for married couples that have separated.

“The Married Filing Jointly (MFJ) status has several advantages. It also simplifies and streamlines tax preparation by requiring only one tax return,” he says. 

“However, there may be some drawbacks. Because both spouses are jointly liable for any taxes owed, one spouse's financial problems or mistakes can affect the other. Furthermore, combining incomes may result in a higher overall tax bracket and the loss of certain deductions or credits.”

In short: when you file using the MFJ status, both you and your spouse are responsible for all tax, penalties, and interest owed. 

As a result, you need to communicate effectively with one another and make sure you’re sharing all the correct documentation with one another (and your accountant).

It’s also important to note that if your spouse doesn’t pay the tax they owe, you might end up getting stuck with the tax bill.

That means if you and your spouse aren’t on great terms, MFJ might be more trouble than it’s worth in the long run.

What are the Benefits of Using the Married Filing Separately (MFS) Status? 

If you’re living separately from your spouse but you’re still legally married, you may also want to consider the MFS status. 

This status is often used when you’ve been living apart from your husband or wife for an extended amount of time, and it can offer estranged couples some peace of mind in knowing they’re both responsible for their own tax affairs.

If you don’t have faith in your spouse’s record-keeping or you don’t want to end up sharing a tax bill and any associated penalties, MFS is often the safer option.

But according to Katrina L. Martin, an Enrolled Agent and Certified Tax Coach at Wow Tax & Advisory Service, filing separately isn’t just a smart idea because it helps you protect your finances.

“Typically, couples who file Married Filing Jointly receive more tax breaks, but sometimes it might be a good idea to consider filing a married filing separate tax return,” she explains.

If a spouse has outstanding child support payments, filing separately would prevent the IRS from taking the other spouse's portion of any refund.

Likewise, MFS can also be a beneficial route if a couple’s joint income is too high to qualify for the Medical Expense Deduction. As a point of reference, medical expenses you claim need to be more than 10% of your adjusted gross income (AGI) to use the deduction.

By using the Married Filing Separately status, one spouse could qualify to deduct their medical expenses. So if you and your spouse have had big medical expenses in the most recent tax year, MFS will enable you to make those medical expenses as itemized deductions.

When Does it Make Sense to File Using the Head of Household Status?

Generally speaking, the two most common ways for married couples living separately to file their tax returns are to use the MFJ or MFS status. But if you’d like to file individually and are looking for bigger tax breaks than the MFS status can offer, there is one alternative.

“In certain circumstances some married taxpayers who lived apart from their spouse during the last six months of the year and provided for dependent children may be ‘considered unmarried’ and qualify to file as Head of Household,” says Wow Tax & Advisory Service’s Katrina L. Martin.

The Head of Household filing status enables parents who provide more than half the cost of upkeep for qualifying dependents to claim a bigger Standard Deduction

In 2022, the Standard Deduction for this status was capped at $19,400. If you were using the MFS status, your cap would have been sitting at $12,950.

They also get taxed at lower rates than those filing to the IRS using an MFS or MFJ status.

For example, single filers in 2022 had to pay a 12% tax rate on any taxable income between $10,275 and $41,775. Anything above that cap was taxed at 22%.

But if you use the Head of Household status to file your return, that same 12% rate is applied for income from $14,650 to $55,900.

That means if you had $50,000 worth of taxable income in 2022, you’d save more than $900 worth of income taxes by choosing to file as a Head of Household rather than filing as an individual.

Although this sounds like a great way to file, it’s pretty hard to qualify for the Head of Household status.

The IRS will only let you file as a Head of Household if you’re married and:

  • You and your spouse didn’t live in the same home for the last six months of the tax year

  • You paid over half the costs of keeping your home and taking care of any dependents

  • Your home was the main residence for more than half the tax year of an eligible dependent

  • You can claim the exemption for relevant dependents

To qualify for this status, all of these criteria must be met — and for reference, the IRS counts a “dependent” as a child, stepchild, or foster child.

Where exemptions are concerned, it’s worth noting there’s one exception. If the noncustodial parent to your dependent is claiming the child under rules for separated parents, you’ll normally still qualify for the Head of Household status.

What do Married Couples Living Separately Need to Know About Filing Taxes?

It doesn’t matter whether you’re estranged from your spouse or simply in a long-distance relationship. When tax season rolls around, you’ll need to make a choice about how the two of you will be filing — and there are several considerations you need to bear in mind.

“When filing their taxes, separated couples must first determine their filing status, whether Married Filing Jointly (MFJ) or Married Filing Separately (MFS), and weigh the tax implications of each option,” says The Bottom Line Group’s Michael Hammelburger.

To ensure accurate reporting of income, deductions, and credits, it is critical to communicate and coordinate with the estranged spouse. They should also discuss the allocation of joint expenses such as mortgage interest and property taxes.”

Likewise, you’ll need to ensure that any legal agreements or court orders surrounding financial responsibilities or support payments are kept on file and accessible to all parties — including any financial professionals the two of you may be working with.

That level of organization and communication can be incredibly complicated between multiple parties when you’re living separately and trying to hit a filing deadline. That’s where a Family Operating System® like Trustworthy can make life a lot simpler.

Trustworthy enables you to store digital copies of all your records in a fully secure, cloud-based digital safe. That includes everything from IDs and tax information to estate documents, insurance documents, property deeds, and everything in between.

You can then invite collaborators like your accountant or financial planner to log in and securely access the documents they need to get your taxes (and everything else) in order.

Ready to find out more? Take a look at Trustyworthy’s wide range of features and get started now.

Frequently Asked Questions

Do the Same Tax Credits Apply to Couples Regardless of Whether They're Filing Jointly or Separately?

No. Couples can generally claim a wider range of tax credits when filing jointly. Using the Married Filing Jointly (MFJ) status also lets you claim higher deductions — helping you bring down your overall tax liability.

What are the Disadvantages of Filing Separately?

The biggest disadvantage is that you won’t be able to claim as many tax credits. By using the Married Filing Single (MFS) status, you’re missing out on the Earned Income Tax Credit, Adoption Credit, and American Opportunity Tax Credit.

What are the Cons of Married Filing Jointly (MFJ)?

The biggest disadvantage of using the MFJ status is that you and your spouse will share responsibility for any tax, interest, and penalties owed. If you’re estranged, these shared responsibilities could lead to issues.

Finances

Filing Taxes as a Married Couple Living Separately: What You Need to Know

Nash Riggins

|

June 6, 2023

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Tax season can be complicated at the best of times. But marriage can add an extra layer to those complications — especially if you and your spouse live apart.

Maybe you and your husband or wife are estranged but not divorced. Or, you might still be together but just live in different homes or cities.

No matter what your situation is, there are a couple of different filing options available to couples that live separately. 

In this guide, we’ll walk you through the different IRS filing statuses available to married couples living separately and the different deductions and tax credits that may be available to you.

Key Takeaways

  • Married couples living separately can file taxes using three statuses: Married Filing Jointly (MFJ), Married Filing Separately (MFS), or Head of Household with a Qualifying Person.

  • Filing jointly lets you benefit from a wider range of tax credits and a higher level of deductions.

  • By using the Head of Household status, you’ll benefit from a lower tax rate and higher Standard Deduction — but the eligibility around this status can be complicated.

What are the Different Filing Options Available to Married Couples Living Separately?

If you and your spouse are separated but still legally married, there are three main filing routes that your financial advisor will probably recommend to you.

Those options are:

  • Married Filing Jointly (MFJ)

  • Married Filing Separately (MFS)

  • Head of Household with a Qualifying Person

It’s worth noting that there are other tax statuses that the IRS observes. These are “Single” and “Qualifying Widow(er) with a Dependent Child”. But if you’re still married, you can’t file as Single — even if you’re estranged from your husband or wife.

The filing status that you choose to go for might depend on a few different factors. 

For example, you’re going to benefit from more tax breaks if you choose the MFJ status. But if you’re not on great terms with your spouse and you don’t want to complicate things, you might be willing to sacrifice those benefits by going with the MFS status.

The Head of Household status can be even more complicated, and you’ll probably need an accountant’s help to file this way — but you’ll benefit from some larger deductions by putting up with the hassle.

To help you understand the difference between each of these three filing methods and how to decide between them, let’s quickly break down the eligibility requirements, pros, and cons of each filing status.

What is the Difference Between Married Filing Jointly and Married Filing Separately?

“When married couples choose to live apart, they usually have two tax filing options: married filing jointly or married filing separately,” explains Michael Hammelburger, certified financial advisor and CEO The Bottom Line Group, a cost segregation firm based in

Baltimore.

“Married couples filing jointly can combine their income and deductions on a single tax return, potentially resulting in lower overall taxes. Married filing separately, on the other hand, entails each spouse filing their own tax return, reporting their individual income and deductions.”

Translation: filing jointly is probably going to be cheaper, but filing separately might be easier. That being said, the benefits of each filing status are a tiny bit more nuanced than that. Let’s take a look.

What are the Benefits of Using the Married Filing Jointly (MFJ) Status?

If you’re married, it generally makes more sense to file jointly. That’s because the IRS reserves a number of tax credits for married couples. The most popular tax credits married filers will benefit from include:

  • The Earned Income Tax Credit

  • The Child and Dependent Care Tax Credit

  • The American Opportunity Tax Credit

  • The Lifetime Learning Education Tax Credit

With the Earned Income Tax Credit alone, you can claim up to $24,210 when filing jointly — or up to $63,698 if you and your spouse have three kids.

By contrast, you can only claim $17,640 if you’re childless and filing on your own (or $56,838 if you’ve got three children).

Likewise, MFJ taxpayers will qualify to write off up to $2,100 worth of childcare expenses as part of the Child and Dependent Care Tax Credit, up to $2,500 per person thanks to the American Opportunity Tax Credit, and $2,000 thanks to the Lifetime Learning Tax Credit.

You’ll also benefit from a Student Loan Interest Deduction — not to mention a higher level of deductions overall.

For 2023, the standard deduction for a couple filing jointly was $27,700. By contrast, you’ll only get to deduct up to $13,850 if you are Married Filing Separately or you're single.

That being said, The Bottom Line Group’s Michael Hammelburger does point out there are some situations in which the MFJ status might make things a bit awkward or more difficult for married couples that have separated.

“The Married Filing Jointly (MFJ) status has several advantages. It also simplifies and streamlines tax preparation by requiring only one tax return,” he says. 

“However, there may be some drawbacks. Because both spouses are jointly liable for any taxes owed, one spouse's financial problems or mistakes can affect the other. Furthermore, combining incomes may result in a higher overall tax bracket and the loss of certain deductions or credits.”

In short: when you file using the MFJ status, both you and your spouse are responsible for all tax, penalties, and interest owed. 

As a result, you need to communicate effectively with one another and make sure you’re sharing all the correct documentation with one another (and your accountant).

It’s also important to note that if your spouse doesn’t pay the tax they owe, you might end up getting stuck with the tax bill.

That means if you and your spouse aren’t on great terms, MFJ might be more trouble than it’s worth in the long run.

What are the Benefits of Using the Married Filing Separately (MFS) Status? 

If you’re living separately from your spouse but you’re still legally married, you may also want to consider the MFS status. 

This status is often used when you’ve been living apart from your husband or wife for an extended amount of time, and it can offer estranged couples some peace of mind in knowing they’re both responsible for their own tax affairs.

If you don’t have faith in your spouse’s record-keeping or you don’t want to end up sharing a tax bill and any associated penalties, MFS is often the safer option.

But according to Katrina L. Martin, an Enrolled Agent and Certified Tax Coach at Wow Tax & Advisory Service, filing separately isn’t just a smart idea because it helps you protect your finances.

“Typically, couples who file Married Filing Jointly receive more tax breaks, but sometimes it might be a good idea to consider filing a married filing separate tax return,” she explains.

If a spouse has outstanding child support payments, filing separately would prevent the IRS from taking the other spouse's portion of any refund.

Likewise, MFS can also be a beneficial route if a couple’s joint income is too high to qualify for the Medical Expense Deduction. As a point of reference, medical expenses you claim need to be more than 10% of your adjusted gross income (AGI) to use the deduction.

By using the Married Filing Separately status, one spouse could qualify to deduct their medical expenses. So if you and your spouse have had big medical expenses in the most recent tax year, MFS will enable you to make those medical expenses as itemized deductions.

When Does it Make Sense to File Using the Head of Household Status?

Generally speaking, the two most common ways for married couples living separately to file their tax returns are to use the MFJ or MFS status. But if you’d like to file individually and are looking for bigger tax breaks than the MFS status can offer, there is one alternative.

“In certain circumstances some married taxpayers who lived apart from their spouse during the last six months of the year and provided for dependent children may be ‘considered unmarried’ and qualify to file as Head of Household,” says Wow Tax & Advisory Service’s Katrina L. Martin.

The Head of Household filing status enables parents who provide more than half the cost of upkeep for qualifying dependents to claim a bigger Standard Deduction

In 2022, the Standard Deduction for this status was capped at $19,400. If you were using the MFS status, your cap would have been sitting at $12,950.

They also get taxed at lower rates than those filing to the IRS using an MFS or MFJ status.

For example, single filers in 2022 had to pay a 12% tax rate on any taxable income between $10,275 and $41,775. Anything above that cap was taxed at 22%.

But if you use the Head of Household status to file your return, that same 12% rate is applied for income from $14,650 to $55,900.

That means if you had $50,000 worth of taxable income in 2022, you’d save more than $900 worth of income taxes by choosing to file as a Head of Household rather than filing as an individual.

Although this sounds like a great way to file, it’s pretty hard to qualify for the Head of Household status.

The IRS will only let you file as a Head of Household if you’re married and:

  • You and your spouse didn’t live in the same home for the last six months of the tax year

  • You paid over half the costs of keeping your home and taking care of any dependents

  • Your home was the main residence for more than half the tax year of an eligible dependent

  • You can claim the exemption for relevant dependents

To qualify for this status, all of these criteria must be met — and for reference, the IRS counts a “dependent” as a child, stepchild, or foster child.

Where exemptions are concerned, it’s worth noting there’s one exception. If the noncustodial parent to your dependent is claiming the child under rules for separated parents, you’ll normally still qualify for the Head of Household status.

What do Married Couples Living Separately Need to Know About Filing Taxes?

It doesn’t matter whether you’re estranged from your spouse or simply in a long-distance relationship. When tax season rolls around, you’ll need to make a choice about how the two of you will be filing — and there are several considerations you need to bear in mind.

“When filing their taxes, separated couples must first determine their filing status, whether Married Filing Jointly (MFJ) or Married Filing Separately (MFS), and weigh the tax implications of each option,” says The Bottom Line Group’s Michael Hammelburger.

To ensure accurate reporting of income, deductions, and credits, it is critical to communicate and coordinate with the estranged spouse. They should also discuss the allocation of joint expenses such as mortgage interest and property taxes.”

Likewise, you’ll need to ensure that any legal agreements or court orders surrounding financial responsibilities or support payments are kept on file and accessible to all parties — including any financial professionals the two of you may be working with.

That level of organization and communication can be incredibly complicated between multiple parties when you’re living separately and trying to hit a filing deadline. That’s where a Family Operating System® like Trustworthy can make life a lot simpler.

Trustworthy enables you to store digital copies of all your records in a fully secure, cloud-based digital safe. That includes everything from IDs and tax information to estate documents, insurance documents, property deeds, and everything in between.

You can then invite collaborators like your accountant or financial planner to log in and securely access the documents they need to get your taxes (and everything else) in order.

Ready to find out more? Take a look at Trustyworthy’s wide range of features and get started now.

Frequently Asked Questions

Do the Same Tax Credits Apply to Couples Regardless of Whether They're Filing Jointly or Separately?

No. Couples can generally claim a wider range of tax credits when filing jointly. Using the Married Filing Jointly (MFJ) status also lets you claim higher deductions — helping you bring down your overall tax liability.

What are the Disadvantages of Filing Separately?

The biggest disadvantage is that you won’t be able to claim as many tax credits. By using the Married Filing Single (MFS) status, you’re missing out on the Earned Income Tax Credit, Adoption Credit, and American Opportunity Tax Credit.

What are the Cons of Married Filing Jointly (MFJ)?

The biggest disadvantage of using the MFJ status is that you and your spouse will share responsibility for any tax, interest, and penalties owed. If you’re estranged, these shared responsibilities could lead to issues.

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