The IRS allows you to choose the "married filing separately" status if you are legally married at the end of the year. This means that you and your spouse both file individual tax returns based only on your own income and expenses. For shared deductible expenses, such as the mortgage interest, you can only claim the amount that you paid on your own. If your spouse itemizes deductions, you must also itemize, even if the standard deduction would be more advantageous.
Head of Household and Married Filing Separately
In some cases, you can file as head of household while still married, if your spouse files a separate return. To qualify for head of household status, you and your spouse must have lived apart for the last six months or more of the year, not including temporary absences. You must pay more than half of the household expenses, your home must be your child's main home and you must be able to claim your child as a dependent. If you qualify for head of household status, you can take the standard deduction even if your spouse itemizes.
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Advantages to Filing Separately
For some couples, filing separately can provide a lower net income tax burden. A couple filing jointly might be in a situation where deductions or exemptions are limited by the adjusted gross income, while filing separately would limit only one or neither of them. Deductions that must exceed a certain percentage of income, such as medical or miscellaneous itemized deductions, might be too small to be deducted on a joint return but large enough for a deduction on a separate return.
Disadvantages to Filing Separately
Choosing married filing separately on your return forfeits many credits that are available to married taxpayers filing jointly. Separate filers cannot take the earned income credit, the child and dependent care credit, the adoption credit, or any education credits or deductions. Other credits and deductions are reduced at half the income level of a joint return, such as the child tax credit, the retirement savings credit, the personal exemption and itemized deductions.
Changing Your Filing Status
If you file your return as married filing separately, and then decide you would rather file a joint return, the IRS allows you to change your filing status. Use Form 1040X to file an amended return with joint status. You must file within three years of the due date, not including extensions, of the original return. If you file a joint return, you cannot amend it to married filing separately status after the tax return due date.