Determining your tax filing status can be tricky at times. I see the same questions on social media and a few times per year in my office where people are confused on what filing status to use when they are estranged from their spouse. On the tax subgroup in Reddit the question popped up a few times this tax season already and with two new clients in the past week.
I included a decision tree to help you determine your filing status. However, there are details that didn’t fit within the decision tree neatly so it is important to read the text of this post to assure you are using the correct filing status.
There are several reasons when you may want to consider filing a separate return from your spouse. In rare instances your combined tax liability is smaller. Example: spouses have widely different incomes and one spouse has a very large uninsured medical expense.
A more important reason to file a separate from your spouse is if you suspect malfeasance. If you file a joint return and your spouse under reports income and/or overstates deductions and/or credits you are liable for the tax debt if the IRS discovers the irregularities. The only way to sever liability on a joint return is if you signed under threat or duress. Threat or duress is very hard to prove and the IRS has a history of denying relief when there are no reports of abuse to law enforcement.
The final reason to file a separate return is because you have no choice because you don’t know where your spouse is. This is more common than you think. The Reddit subgroup above has similar questions every tax season. As mentioned, two new clients had this issue in my office in the past week.
If you can’t find your spouse or she/he refuses to file a joint return, you have limited options. The decision tree in this post is an easy way to visualize your choices. In short, if you lived with your spouse at any time in the last six months of the year you must file either a joint or married filling separate return. If you lived apart the last six months of the year and provide more than half the support for yourself and child you can file as head of household. Where no children are involved you are limited to MFJ or MFS. If you are legally separated or the divorce is final you can file as single. You will need the services of a competent attorney if you can’t find your spouse to facilitate a legal separation or divorce proceedings.
There are tremendous negatives to filing a MFS return. Many credit are lost (earned income credit, adoption credit and child and dependent care credit are a few). Education credits and the student loan interest deduction are unavailable on a MFS return. If you own income property the passive activity loss limit is reduced to $12,500 ($0 if you lived with your spouse at any time during the year).
If your spouse itemizes on a MFS return you MUST also itemize, regardless if you have any Schedule A deductions or not. If you can’t find your spouse or he refuses to communicate with you, you will not know if he itemizes so you may have no choice other than to itemize.
You report only your income and deductions on a MFS return unless you live in a community property state (AZ, CA, ID, LA, NV, NM, TX, WA and WI). In community property states you report half the community property income and deductions. If income and deductions are not reported to the other spouse the benefits of community property law can be lost. Community property laws can be circumvented fairly easy if the taxpayers live apart.
Let’s review the decision tree and review the notes that follow.
Notes to the decision tree: If your spouse died during the year you can still file a joint return for the current year. If you paid over half the costs of keeping a home with dependent child you can file as a qualifying widow/er for the two years following the death of your spouse. A qualifying widow/er enjoys the same advantages of a MFJ return.
Temporary absences for education or military service do not count as living apart.
If you sign a release of exemption as a custodial parent and would otherwise be allowed the dependent exemption you can file as head of household if you lived apart from your spouse the last six months of the year.
A parent does not have to live with you to claim the exemption if you provided more than half the cost of keeping the parent’s home for the entire year.
The simplest part of the tax return can become a confused mess when unique situations make an appearance. The raw number of requests involving a missing spouse required me to publish on the subject.
If you have additional questions leave a note in the comments. I’ll try my best to answer questions promptly. During tax season and when on vacation I’ll need more time to respond.
Tuesday 21st of February 2023
My husband walked out on me 12/03/2022 2 days after I came home from the hospital on oxygen after having pneumonia. He has not been home since. We know where he is now living but he will not communicate in any way. Does not answer phone, his door or respond to emails. We have been married 51 years! What do I do about filing federal & Staye taxes???
Keith Taxguy, EA
Tuesday 21st of February 2023
I am so sorry, Colleen.
For taxes the answer is simple: file MFS (married filing separately). The rules for filing MFS will depend on the state you live in (marital property vs equitable property). You will need a tax professional to help with this as there are serious tax issues involved. Check out the "Tax Pro Near Me" link at the top right of the home page of this blog to find a tax professional to help you. Keep in mind you do not need a local tax pro, just a seasoned one.
To familiarize yourself with the difference between equitable and marital property states, check out this blog post.
Sunday 14th of February 2021
My husband moved out of the house in March 2020. He will not cooperate/communicate with me for filing for separation. Is there any way that I can still file as an individual for 2020 to avoid higher taxes of filing as married/separately? What does the IRS require for proof of physical separation
Sunday 14th of February 2021
You will need to file married filing separately. This can get complex and you might want to hire a tax professional. For example, the rules are different between equitable and marital property states. Your facts and circumstances will determine the choices available to you.
Friday 13th of December 2019
Will keep this brief: my husband left January 5 after 31 year marriage and on May 14 I flew out to the Middle East to see if I could locate him. I did and convinced him to come back home in August. All he returned for was to sign papers on the sale of a home and to take 3/4 of the money without my co sent and return back to the Middle East. I’ve had no contact with him since October 20 and he’s refusing to return any emails. I’m not sure even where he is now. I know he bought a 2-way ticket to return in March, but don’t believe he will be returning. Can I file head of household.? And if he cannot be located, can I file for legal separation? Thank you. I live in California too if that needs to be known.
Monday 23rd of April 2018
I married in 2017. We don't have any kids and we rent. However, we both have sizable student debt. I make more than my wife as she is finishing her school. This year (2017) we filed separately because my wife didn't want the banks that hold our student loans to add my income to hers and increase her payments (which they have said is their policy). I am on the Public Service Loan Forgiveness Plan so I will save more money making my 120 qualifying payments versus paying off my debt as quickly as possible but my wife does not have that option. The result of filing separately was I actually had to pay some additional taxes and neither of us can contribute to a Roth IRA. For 2017 I moved my money into a Traditional IRA which was allowed but I didn't receive any tax breaks (I max out my 401k).
Is there any benefit to maxing out a traditional IRA married filing separately as opposed to a taxable investment account? My understanding is that while I don't get a tax break I am still not being taxed within the traditional IRA. Plus I can later move the money into a backdoor Roth.
If we open up a joint taxable mutual fund but still file separately can I put it on my taxes singularly or does my wife also need to register the investment account?
For married couples with significant student debt (over $100,000 jointly) do the cons outweigh the pros filing jointly?
Monday 9th of April 2018
I have a question that's kind of related...
My mother passed away a month ago. Some remaining medical bills have come in now, and there's about 5K still owed. There's around 30K in her IRA account that I have inherited. My question is this. I'm in a MUCH higher tax bracket than her. If I withdraw money from IRA to pay her remaining bills, can that withdrawal be taxed on her return, or does it have to go on mine?
(And for anyone thinking I shouldn't be worried about the difference in taxes after my mother just passed and the fact that I am financially well off, that is correct. I am not worried about this matter. This is more a question out of curiosity. I thought Keith may have seen this before, and I thought it might help someone else.) My guess is the money should have been withdrawn before my mom's death, and this is one of those tax "gotchas".
Monday 9th of April 2018
Once mom died you inherited the IRA account. Distributions will be taxed to you regardless what they are used for. If you provided over half of mom's support prior to death then you can deduct her medical bills on Schedule A of your return when paid.