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| or her income or if you do not want to be responsible for any taxes due if your spouse does not have enough tax withheld or does pay enough estimated tax. |
| We often wonder why we even have married filing separately filing status. Many tax professionals tell you right off not to file Married Filing Separately. Why? Basically, if you file Married Filing Separately, you end up paying more tax and end up qualifying for less credit and deductions. Married Filing Separately is notorious for not being chosen as a filing status by many tax professionals and taxpayers. This is so much so that some tax professionals don't care to learn the ins and outs of this filing status. The following are consequences of selecting Married Filing Separately when you file your tax return. |
| * Tax rate generally is higher. * Exemption amount for figuring the alternative minimum tax is half that allowed on a joint return. * Credit for child and dependent care expenses not allowed in most cases * Amount of exclusion from income under an employer's dependent care assistance program is limited to $2,500 instead of $5,000. * Earned income credit not allowed. * Exclusion or credit for adoption expenses not allowed in most cases. * Education credits such as the American opportunity credit, lifetime learning credit, or the deduction for student loan interest are not allowed. * Exclusion of any interest income from qualified U.S. savings bonds you used for higher education expenses are not allowed. |
| Additionally, if you lived with your spouse at any time during the tax year and you are married filing separately, you are prevented from doing certain things such as claiming certain credits or taking certain deductions. |
| * The credit for the elderly or the disabled is not
allowed. * A greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received must be included in your income. * The child tax credit is reduced at half income levels than if you filed jointly. * The retirement savings contributions credit is is reduced at half income levels than if you filed jointly.. * The deduction for personal exemptions, and Itemized deductions are is reduced at half income levels than if you filed jointly. * Capital loss deduction limit is $1,500 instead of the $3,000 on a joint return. * If your spouse itemizes deductions, you cannot claim the standard deduction. |
| Copyright © 2015 [Hera's Income Tax School]. All Annual Federal Tax Refresher Course rights reserved. |
| Revised: 05/31/15 |
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