If you are married according to Federal law, you have a choice of filing Married Filing Jointly (MFJ) or Married Filing Separately (MFS). The common question is “Which one is best for me?”

As with most tax related questions, “It depends.” First, make sure you are married according to Federal law.

For Federal taxes, you are considered married if on the last day of the year you are married and living together. This includes same sex marriages recognized in the state where you were married, and common law marriages that are recognized in the state where you now live or in the state where the common law marriage began. Even if living apart, on the last day of the year you are considered married if there is no legal decree of divorce or separate maintenance.

While some states have recognized same-sex marriages, partnerships, and/or unions for some time, the IRS only recently started recognizing legal marriages for same-sex partners.

The following describes some benefits and pitfalls of choosing MFJ vs. MFS.

Married Filing Separately (MFS) taxpayers are only responsible for their income and taxes (and not for a spouse), but may not be eligible to claim the following tax benefits:

• Tuition and fees deduction

• Student loan interest deduction

• Tax-free exclusion of US bond interest

• Tax-free exclusion of Social Security Benefits

• Credit for the Elderly and Disabled

• Child and Dependent Care Credit

• Earned Income Credit

• Education Credits

Other drawbacks of Married Filing Separately:

• Taxpayers have a much lower income phase-out range for IRA deductions.

• Both spouses must claim the standard deduction, or both must itemize their deductions. One spouse cannot claim the standard deduction if the other is itemizing.

• This filing status generally pays the most tax of all the filing statuses.

When it may make sense to file separately

Since filing a joint return requires the consent of both spouses, it might sometimes make sense to not be included on your spouse’s tax return. Signing a joint tax return makes you both responsible for the accuracy and completeness of the return and obligates you for any current or future tax liability or penalties.

There are specific situations when it can be better to file separately. These include:

• When you need to separate your tax liability from your spouse. If you file separately, you will only be responsible for the accuracy and payment of taxes for your own return.

• In certain situations when there is a large disparity between incomes of the spouses. This may result in a combined lower tax situation, but usually only in separate (non-community) property states. See Married Filing Separately in a Community Property State below.

If you are not sure, complete your taxes both ways to see which one may be best for you.

Married and Choosing Head of Household Status

In certain situations you can be considered unmarried for tax filing purposes. You may be able to use Head of Household if you and your spouse did not live together during the last six months of the year and you maintained a home for your child for more than half the year.

This filing status can allow you to claim the earned income credit along with other credits. Additionally, your standard deduction will be higher than if you file as Married Filing Separately.

Married Filing Separate in Community Property State

When one or both spouses live in a community property state special rules apply for allocating income and deductions between each spouse’s tax return. Community property states are: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.

Each spouse generally reports one-half of the total income on each tax return.

The same goes for deductions, each spouse generally gets half of the deductions. This is not often exact, as for couples with an odd number of children.

What If My Spouse Died During the Year?

If your spouse died during the year, you are considered married for the whole year for tax filing purposes. File Married Filing Jointly for most situations. If you remarried during the year, you could file a joint return with your new spouse.

If you also have a dependent child, in the 2 years following the year of your spouse’s death, your status may be Qualifying Widow(er), which has certain tax advantages.

What if You Change Your Mind?

• Married Filing Separately taxpayers can amend their returns and change to Married Filing Jointly within three years of the original due date of the return.

• However, Married Filing Jointly have only until the April 15th tax deadline to change their minds and switch to Married Filing Separately.

What About An Annulled Marriage?

If you obtain a court decree of annulment which holds that no valid marriage ever existed, you are considered unmarried even if you filed a joint tax return in an earlier year.

After an annulment, you must file amended returns for any previous years you filed as Married Filing Jointly for all tax years affected by the annulment that are not closed by the statute of limitations (generally 3 years). The amended returns should use either single, or if you qualify, Head of Household status.

How to Compare Filing Joint or Separate

All tax professionals and many tax programs allow you to split a tax return to see the results. You will enter items of income, deductions, and other items and identify each item (by a check box) as to which spouse they apply to. When the program splits the return it will use that information to assign the items to the respective spouse.

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