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Drawbacks of married couples filing separately

Categories Tax Tips (Fed)

If you choose to file as married filing separately, you generally will not qualify for the earned income tax credit, the education credits, deduction for student loan interest, tuition and fees deduction, or the child and dependent care credit. If you take part in an employer’s dependent care assistance program, the amount excluded is limited to one-half of the married filing joint amount.

If one spouse itemizes deductions, the other must also itemize their deductions, even if their total deductions are less than the standard deduction. If the standard deduction is used by both spouses, each can claim only one-half of the amount allowed on a joint return.

In addition, the following deductions and credits are reduced at income levels that are one-half of those for a joint return:
Child tax credit;
Retirement savings contributions credit;
Itemized deductions;
and Personal exemptions.

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