Couples who were married at any point during the year are viewed as married for the entire year. Filing jointly allows the couple to use the tax table or rate schedule , which operates to average the tax over both individuals and produce tax savings. Joint filing is also necessary in order to take advantage of certain tax breaks. However, there are some situations in which filing separately may make sense.

The following tax breaks only apply to married filing jointly taxpayers:

  • The $25,000 rental loss allowance
  • Credit for the elderly or permanently disabled
  • IRA deduction for a nonworking spouse
  • Education credits
  • Tuition and fees deduction
  • Student loan interest deduction
  • Dependent care credit (unless living apart for the last 6 months of the year)
  • Earned income credit (unless living apart for the last 6 months of the year)

If you receive Social Security benefits, joint filers may need to include only 50% or perhaps none of the benefits in income; separate filers automatically must include 85% of benefits in income.

Even though there are compelling reasons to file jointly, there are two key situations in which separately filing is advisable:

  • To limit tax liability for the other spouse. If a joint return is filed, both spouses usually are liable for the tax. When one spouse has concerns about the other spouse’s tax positions, separate filing will avoid liability related to the other spouse’s positions that could result.
  • To maximize deductions and lower taxes. If couples itemize and the spouse with the lower income has greater medical, casualty and theft, and/or miscellaneous itemized deductions (deductions that have adjusted gross income thresholds), separate filing can enable greater write-offs and result in lower total income tax for the couple.

Our Best Advice:

There is not a blanket answer as to which filing status is most beneficial since every situation is different.  When in doubt about which filing status to use, figure your taxes both ways—joint and separate—and compare your results.