When Should a Married Couple File Taxes Separately?

When a married couple file taxes separately, they lose certain tax benefits. For this reason, most couples file taxes jointly. There are, however, certain situations where it is beneficial for married couples to file separate tax returns.

Illegal Activity

If your spouse is evading taxes or performing other illegal activities for gain, it may be best to file taxes separately. When you file a joint tax return, you are both liable for any tax deficiencies. There are innocent spouse rules to protect you in the event that your spouse is doing illegal activities that you do not know about. If you know of illegal activities, do yourself a favor and file a separate return. You can not claim innocence if you know about illegal activities. You also would be well advised to make friends with a competent tax attorney or CPA.

Your Spouse Owes Hefty Back Child Support

The IRS will take your tax refund if your spouse owes back child support. If your spouse owes a considerable amount of child support, don't let the IRS seize the money you have earned from your work. File your taxes separately and allow any refunds that your spouse is entitled to to go to his/her children.

Hefty Medical Bills

Allowable deductions for medical bills depend on your income. If you can file a separate return to exclude your spouses earnings, you might be entitled to more medical deductions. Be cautious and consider the tax benefits that are lost through separate filing status. Someone who is interested in maximizing tax deductions through filing status should talk to a tax attorney or CPA.

You or Your Spouse Have High Investment or Job-Related Expenses

Investment and job-related expenses are deducted based on a calculation that considers income. Like medical bills, filing separately may allow you to reap more tax benefits. As some tax benefits, such as higher exemptions and deductions, are taken off the table, visit with a CPA or tax attorney to make sure you choose the right filing status.

You Don't Understand Your Spouse's Affairs

If your spouse is self-employed or has complex financial affairs that you don't understand, you might be better off filing separate tax returns. This is particularly true if your spouse gets angry or defensive when you question the deductions or income claimed on the return. Remember, you are personally liable for any misstatements. Even if you lose tax benefits, you might prefer to just file a separate return so that you don't have to worry about consequences of your spouse's actions.

References

• IRS
• Attorney-CPA Society