Tuesday, June 11, 2024

How To File Taxes If Married But Living Separately

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Your Tax Filing Status

When Married Filing Separately Will Save You Taxes – Presented by TheStreet TurboTax

Your filing status is used to determine if you must file a tax return, the standard deduction, and the amount of tax you are required to pay. The filing status also impacts claims to other deductions and credits. When determining a filing status, you must first look at your marital status on the last day of your tax year. You are considered unmarried for the whole year if you have obtained a divorce decree by the last day of your tax year or:

  • You file a separate return,
  • You paid more than half of the cost of keeping up your home for the tax year,
  • Yours spouse did not live in the home during the last 6 months of the tax year,
  • Your home was the main home for your child, stepchild, or foster child for at least 6 months of the tax year, and
  • You must be able to claim the child as a dependent.

The foregoing does not include living in separate homes due to military service, medical treatment, attendance at college or university, and other similar temporary circumstances. Conversely, you are considered married for the whole year even if you are by the last day of your tax year.

What Is Married Filing Separately

When filing separately, the couple files two separate tax returns. A spouse puts their income, expenses, and deductions on one federal return. The other spouse puts their information on a completely different tax filing. When filing separately, if one spouse itemizes their deductions, the other spouse must do the same. This prevents the spouse that would prefer not to itemize from benefiting from a higher standard deduction. It is possible that, by filing separately, both spouses will be in lower tax brackets, thereby keeping their tax rates lower.

Filing Taxes As Married

One of the essential things to be considered before marriage is they need to be open about their finance to one another. There is nothing to be surprised about, or there should not be any surprises after marriage. Usually, when you get married to someone, you often step into everything related to their life, including this tax matter.

Therefore, if you are already married or in a common-law relationship and deciding whether it is useful to choose the joint tax return with your spouse, you need to read this para carefully along with the entire article. You have two filing status options if you are married at the end of the tax year. In most cases, filing jointly can save you money in tax.

When filing jointly, the tax return reports a single taxable income, reflecting both the spouses earning. So, the more the difference between the spouses income, the more tax amount will be saved by filing jointly.

Do married couples have to file taxes together I hope you get the answer. If not, not stop reading at this point and skip the article. Keep reading!

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The Head Of Household Option

You or your spouseor perhaps both of youmight qualify for the head of household filing status if you’re living apart. This is much more advantageous than filing a separate married return, but it comes with a lot of qualifying rules.

You can’t have lived together at any time during the last six months of the year if youre not divorced yet. Your home must have been the primary residence of at least one of your children for more than half the year, or the primary residence of another dependent for the entire year. Some family members, such as your parents, don’t have to live with you to qualify as your dependents, but you must have paid for more than half the cost of maintaining their household elsewhere.

You must pay for more than half the cost of your own household if your dependent lives with you.

You can claim the tax deductions and credits that would otherwise be unavailable to you if youre eligible to file as head of household rather than MFS.

You Lack Spousal Consent


Both spouses must sign the tax return when you file jointly, so you must file a separate return if your spouse can’t or won’t do so because they’re unwilling or unable to consent to filing a joint return. An exception to this rule exists if one spouse dies during the tax year. You can still file jointly for that year if you choose. But you can file separately as well.

Different rules apply to married couples who file separately in community property states. This can impact the benefits or drawbacks of choosing the MFS filing status in those states.

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Tax Rules For Married Couples Who Live Separately

Generally, taxpayers who file using the head of household filing status receive greater tax benefits than single taxpayers or married taxpayers who file separately. As long as both spouses agree to file their taxes jointly, and they are still legally married on Dec. 31, the IRS allows them to file their taxes as married taxpayers filing jointly. The IRS considers the spouses as legally married if they have not received a final decree of divorce. The IRS defers to a state’s definition of “legally married,” and spouses who were married at common law pursuant to their state’s marriage laws can file their taxes as married taxpayers. However, only opposite-gender spouses can file their taxes as married taxpayers, even when their states recognize civil unions and same-sex domestic partnerships.

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What Is The Married Filing Separately Status

Youre only responsible for your own tax return and your own tax payments if you’re married and file a separate return. Your tax refund will be sent to the account you request on your return if you’re due one. You won’t be liable for taxes on the income your spouse earned. You can’t be held legally responsible for any errors or omissions on your spouse’s return, either.

The income spans for tax brackets aren’t as generous if you use the married filing separately status. You’ll be disqualified from claiming many tax deductions and credits as well. The income phaseout limits for other deductions will be harder to meet.

Some spouses just prefer to keep their finances as separate as possible.

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Quirks In State Law Can Trip You Up

Be aware of sensitive areas of state tax law. They can cost you.

For example, in Anne and Jacks case, the couple will have to take care if Anne plans to claim a homestead exemption on her Florida residence. Because the exemption is a valuable one, Florida tax authorities tend to take fairly aggressive positions as to who is eligible to claim it.

Florida allows only one homestead exemption anywhere per individual or family unit. In a 2016 court case, a wife claimed an exemption on a home she solely owned in Florida, while her husband claimed a homestead exemption for a home he solely owned in Indiana. Each spouse was a legal resident of the state where they claimed their respective exemption.

However, the court found that because the couple comingled their finances, the wife was receiving the benefit of her husbands exemption, even though she did not jointly own his Indiana house. Instead of claiming homestead exemptions in both states, Jack and Anne should decide which exemption is more valuable and forgo the other one.

Especially for long-term separations, you may also need to consider the potential impact on your estate planning because some states impose own estate or inheritance taxes. Jack and Anne are lucky neither Georgia nor Florida imposes such a tax.

Rebecca Pavese, CPA, is a financial planner and portfolio manager with Palisades Hudson Financial Groups Atlanta office.

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Despite the fact that youâre married, it doesnât necessarily mean youâll file your taxes as married filing jointly. There is another status available to you: married filing separately.

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File Jointly To Owe Less In Taxes

“In the vast majority of situations it’s better to file jointly than it is to file separately. And that’s because you get higher benefits associated with that,” said Katie Prentke English, a co-founder of Harness Wealth, a digital wealth-management firm.

Most couples, in particular couples where the partners make very different amounts of money, will pay less in tax overall if they file jointly than they would if they paid taxes separately.

Some wealthy couples, including those making more than $600,000, do incur a marriage penalty, according to the Urban-Brookings Tax Policy Center.

How Married Filing Separately Status Impacts Taxes

But MFS status can be somewhat more beneficial for taxpayers who want to claim the itemized deductions with income threshold requirements. The medical expense deduction is only available for the portion of your expenses that exceed 7.5% of your adjusted gross income as of the 2021 tax year, the return you’ll file in 2022. This can be a much lower threshold to meet on one income than on two combined incomes when you file jointly.

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How To Decide Which Filing Status To Use

Consequences of Filing Married Separately

The best filing status will depend on your individual situation. Most people benefit from filing married filing jointly since tax rates can be lower, and there are more tax deductions and credits available when you file married filing jointly. You can use our free TurboTax TaxCaster, to estimate your overall tax picture and tax refund if you file married filing jointly or married filing separately before you file. At tax time, TurboTax will guide you through choosing the right filing status for your situation.

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Can I File My Taxes Married But Separate

Can i file my taxes married but separate? Married couples have the option to file jointly or separately on their federal income tax returns. The IRS strongly encourages most couples to file joint tax returns by extending several tax breaks to those who file together.

Is it illegal to file separately if you are married? In short, you cant. The only way to avoid it would be to file as single, but if youre married, you cant do that. And while theres no penalty for the married filing separately tax status, filing separately usually results in even higher taxes than filing jointly.

What happens if I file my taxes separately if married? By using the Married Filing Separately filing status, you will keep your own tax liability separate from your spouses tax liability. When you file a joint return, you will each be responsible for your combined tax bill .

Can you be married and live separately taxes? If youre married filing separately and living apart, you wont have to cover your spouses tax liability. But if youre married filing jointly, even if youre living apart, you still have a joint tax liability with your spouse. This means that both of you are responsible for paying the taxes that are owed.

When Might It Be A Good Idea To File Separately

In general, couples who file married filing jointly receive more tax breaks, but sometimes it might be a good idea to consider filing a married filing separate tax return.

These situations may include, the following scenarios:

  • If together, the married couples income would be too high to qualify for the medical expense deduction, but filing married filing separately one spouse could qualify to deduct their medical expenses.
  • If your spouses tax bill is significant, then filing separately can serve as protection so your refund would not apply to what your spouse owes.
  • If your spouse has not paid outstanding child support payments filing separately would prevent the IRS from taking your portion of any refund.

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You Don’t Trust Your Spouse

A very good reason good reason to file separately is because you don’t feel comfortable signing a joint tax return with your spouse, which both spouses must do when filing jointly. When you file jointly, you take full responsibility with your spouse, and both signers are responsible for the completeness and accuracy of the entire tax return, and each will each bear full responsibility to the IRS for any additional tax, penalty or interest due on an incorrect tax return.

If you don’t want to merge your tax life with your partner, choosing the separate filing status offers a degree of financial protection because you’re responsible only for your own separately filed tax return.

Joint And Several Liability

Should a Married Couple File Jointly or Separately? TurboTax Tax Tip Video

Theres a downside to filing together if your marriage is on the brink, however. You become jointly and severally liable for all taxes due when you file a joint return with your spouse, even on income that they personally earned. So, for example, if you earned $20,000, and your spouse earned $80,000 , the IRS can collect the taxes due from you. You can be on the hook for misdeeds as well, such as if your spouse is less than honest about their income or fraudulently claims a credit or deduction.

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What Are The Benefits Of Filing Jointly

There are many benefits to filing jointly. In general, you are eligible for a higher standard deduction and you can take advantage of multiple tax credits. Couples with children often receive even more deductions and tax advantages by filing a joint return. Regardless of your filing status, the due date for your return will remain the same. Even if you have a deferred tax liability, your taxes will be due on the same date whether you file jointly or separately.

Tax Tips For Women Going Through Divorce

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The American poet Ogden Nash once wrote, Indoors or out, no one relaxes in March, that month of wind and taxes.

Considering the headlines out of the Midwest last week, March 2012 is unfortunately –proving him right. This month can be tumultuous on many fronts, and for women going through divorce, tax season can be particularly difficult both emotionally and financially.

In an effort to calm at least part of the storm, here are answers to some of the tax questions most divorcing women must grapple with:

What is my tax filing status?

Your federal income tax filing status is set by your marital status on the last day of the tax year.

So, if you are still married on December 31st, then you are considered married for the entire year. Likewise, if you are divorced on December 31st, then you are considered divorced for the entire year.

That part is relatively easy, but if you are legally separated, things are more complicated. Heres why:

What responsibility do I have if I sign a joint tax return?

What happens if we file jointly, and theres an overpayment of taxes?

One last word of caution

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Itemized Deductions Limited By Adjusted Gross Income

When you file your tax return, you will choose between the standard deduction and itemizing your deductions, which allows you to list out every deductible expense.

For the 2020 tax year, the standard deduction looks like this .

If you only take those numbers into consideration, itâs simple to see that married filing jointly is the way to go.

However, if you and/or your spouse both have taxable income and one or both of you have itemized deductions limited by adjusted gross income, donât rush to file jointly. There may be tax advantages of filing separately.

Note: if one spouse itemizes deductions, the other is required to do the same.

Youre Applying For Certain Student Loan Repayment Plans

Marriage and Taxes

Another reason you may wish to file a separate return is to qualify for an income-driven repayment plan to lower your federal student loan payments. The Income-Based and Income-Contingent Repayment Plans plus the PAYE Plan allow married borrowers who file separately to have their payments determined based on their incomes alone. They must be eligible for repayment under the terms of the plan.

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How Married Filing Separately Works

Although most married couples file jointly, they can choose the married filing separately status if they want. There are rules to follow for filing separately, though.

Nonetheless, in the right circumstances, being married and filing separately could save you money. Here are a few things to think about if youre considering whether its right for you.

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