Reasons for Married Filing Separately

Combining lives is a one of the most common aspects of traditional marriage. Along with moving in together and deciding which duplicate appliances will be tossed comes the responsibility of filing taxes as a couple. While most of the time it is advantageous to file jointly, there are circumstances which could make filing separately the most beneficial decision.

Joint Responsibility

Along with filing a joint return comes joint responsibility. If you and your spouse file jointly, then you are both responsible for the completeness and accuracy of your income tax return. For example, if you and your wife file joint and you are a school teacher and she is a small business owner, then you will combine your income and federal withholding on one return for which you are both responsible. If your joint return is audited later due to the fact that your wife failed to include a portion of her income, and the audit results in additional tax owed, then you and your wife are both on the hook for the tax owed. And unfortunately for you, joint liability extends even after divorce.

Debt

In the 21st century, government agencies share taxpayer information for a variety of reasons, one of which is collecting on debts. At the Department of Treasury, the Financial Management Services program is responsible for taking the refunds of taxpayers who owe tax and non-tax debts and forwarding them to the requesting agencies. Examples of tax debts include federal and state tax and examples of non-tax debt includes delinquent child support payments and student loan repayments. If you file jointly with your spouse and he owes a debt, then your refund could be taken and applied to the debt owed. However, if you file separate returns, you are only responsible for your own debt and not that of your spouse.

Considerations

Taxpayers who file separately are not eligible for many of the credits and deductions which are available to those with other filing statuses. For example, separate filers are not eligible for any of the education credits or deductions offered by the IRS, such as the lifetime learning credit or the tuition deduction. This means that the tax rate for separate filers is usually higher than that of joint filers.

References

• Internal Revenue Service: Publication 501
• Internal Revenue Service: Eight Facts About Filing Status
• Internal Revenue Service: Tax Topic 203: Refund Offsets