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Married Filing Jointly & Married Filing Separately (Filing Status)

This is part two of our filing status series (it’s really just two articles) and in this part we’ll take a look at the two married filing statuses – married filing jointly and married filing separately. As we mentioned earlier today, you filing status as of December 31st will basically determine which filing statuses you’ll be able to choose from. If you’re married, and not “considered unmarried,” your two options will be to file as Married Filing Jointly or Married Filing Separately.

I documented the key differences between married filing separately and married filing jointly [3] in the past, based on 2008 tax brackets data, but the same analysis holds true with the updated IRS tax rates [4].

Tax Brackets

Here is a comparison of the tax brackets for both. Remember that when you file jointly, two individuals are reflected on a single tax return. If you file separately, there are two returns, one of each spouse. This is why the Married Filing Separately tax brackets will look more like Single and HoH brackets (in reality, it’s actually much lower once you enter the 25% marginal rate):

Tax Bracket Married Filing Jointly Married Filing Separately
10% Bracket $0 – $17,000 $0 – $8,500
15% Bracket $17,000 – $69,000 $8,500 – $34,500
25% Bracket $69,000 – $139,350 $34,500 – $69,675
28% Bracket $139,350 – $212,300 $69,675 – $106,150
33% Bracket $212,300 – $379,150 $106,150 – $189,575
35% Bracket $379,150+ $189,575+

The standard deduction for Married Filing Jointly is $11,600 and the standard deduction for married filing separately is $5,800, the same as single filers.

Married Filing Jointly

Whereas the rules for Head of Household and Single filing are pretty specific, you really have the option when it comes to preparing your returns when you’re married. You can choose either Jointly or Separately and the rules aren’t very stringent when it comes to limiting which one you can choose. The main consideration, once you get beyond the tax brackets and various credits and deductions, is that both spouses are liable for what is claimed on the tax return. You may be able to escape liability through “innocent spouse relief [5],” but in general both spouses are responsible even if one didn’t earn a penny that year.

Married Filing Separately

If you don’t want the liability and the numbers seem to argue for filing separately, be aware that many credits, deductions, and contribution limits are lowered drastically when you file separately. For example, the Roth IRA income phaseout [6] for someone filing separately is $0 – $10,000 (compared to $105,000 – $121,000 for a single filer in 2010). As married filing separately, you don’t get the student loan interest deduction, earned income credit, child and dependent care credits, and a number of other deductions and credits. Finally, if your spouse is claiming the standard deduction, you also have to claim the standard (likewise if the spouse claims itemized deductions). The deduction “type” has to match.

While there are certainly other rules involved in properly preparing your returns, it’s pretty obvious that the IRS frowns on the Married Filing Separately category.

I hope we’ve done a good job of covering the broad differences between the four filing categories (Single, Head of Household, Married Filing Jointly, Married Filing Separately) in preparation for tax season. If there is anything we missed or anything you want to see covered in greater detail, let us know in the comments!