Advantages for Separate Filers
Separate filers benefit by having their tax accounts remain separate. This can be beneficial for taxpayers with complex tax situations such as those who owe a federal or state debt. This is due to the fact that in many cases, the IRS is allowed to take a taxpayer's joint refund to cover one spouse's prior debt. However, if couples file separately, then their tax accounts remain separate and there is no offset of a joint refund to pay one spouse's debt.
Advantages for Joint Filers
Joint filers generally have a lower tax rate than do separate filers. In addition, they are allowed to take advantage of credits and deductions which separate filers forfeit when they opt to file separate returns.
Disadvantages for Separate Filers
If you file a separate return, one of the main disadvantages you face is that you are not eligible for many of the credits and deductions which lower your overall tax liability. For example, separate filers cannot take the Earned Income Credit (EIC), the credit for adoptive expenses, the education credits, or the credit for dependent child care expenses just to name a few. And even though your return is separate from that of your spouse's, you and your spouse must still use the same deduction method. If your spouse itemizes, then you must itemize as well. If your spouse uses the standard deduction, then you're both required to use the standard deduction.
Disadvantages for Joint Filers
The disadvantage of filing a joint return is that you and your spouse are both responsible for the accuracy of all the information listed on your joint income tax return. This means that if the IRS learns that there are mistakes on your return or that you and your spouse misrepresented information listed on the return, then you and your spouse are both responsible for paying any tax owed. In IRS law, this is known as 'joint and several' liability and it continues even if you and your spouse are divorced. This means the IRS can pursue you and your spouse jointly and separately for all of the tax owed as long as the tax is owed.
If you filed joint and your spouse misrepresented your joint income, or claimed deductions or credits for which you all were ineligible without your knowledge, then you may qualify for innocent spouse relief. Innocent spouse relief can relieve you of some or all of the tax owed if you file for relief within two years of when the IRS attempted to collect the tax. To request innocent spouse relief, complete IRS form 8857 and mail it to your local IRS servicing center.