Ask the Taxman- When should a couple consider filing separately?
The answer to this is very much tied to specific facts and circumstances, but below are four broad categories where spouses should consider filing separately:
- When both spouses make similar incomes, especially when nearing a tax bracket boundary.
- When one spouse has significant unreimbursed medical expenses that would be limited on a joint return but not on the spouses separately filed return. The is usually a situation where the spouse has low or lower income.
- When one spouse is having a refund garnished to pay for an existing tax debt prior to the marriage and the other spouse will get a refund by filing separately. This can also be accomplished by filing Form 8379, Injured Spouse Allocation but it is more risky
- When one spouse is unwilling to accept the risk of being held liable for a position taken by the other spouse on a joint return which may not be legitimate.
In 1 and 2 above, the spouse should still run the numbers both ways.