Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro
Married filing jointly is commonly recognized as the most advantageous filing status. However, are there many reasons to use the married filing separate or (in some cases) the head of household filing status even while you’re still married? The answer is “it depends.” Let’s look at some scenarios where a filing status other than married joint makes more sense. This list is not exhaustive.
The marriage is ending
If spouses are working toward a divorce, it’s probably safe to assume they don’t want any financial connection to remain with their former spouse.
When you file a joint return, you and your spouse have joint liability for all the tax on that return. If the IRS audits the return in the future, you would both have joint liability for the additional tax, penalties, and interest regardless of whose income or deductions caused the additional tax in the audit. Therefore, a jointly filed tax return creates a connection that will last from 3-10 years into the future.
The two spouses have been living apart for an extended period
Sometimes people may not choose to get divorced even if they decide they don’t want to live together. This may include financial reasons why spouses live separately. In either of these cases, filing separately allows both spouses to maintain their separate finances.
If there are children in the home of either spouse, and the spouses have lived apart for more than the second half of the year, and each person pays for more than half the upkeep on their home, they can each file as head of household instead of married filing separate. The head of household filing status will provide a better outcome than the married filing separate status.
Spouses simply prefer maintaining separate finances
Everyone is different, and every marriage may be different. Some couples prefer maintaining separate financial accounts to avoid the common friction that finances can generate in relationships.
If this is how your marriage is, filing separate could be an important barrier between you and your spouse’s finances. When you file separate, nothing in their finances can hurt your finances from a tax return standpoint.
Student loan repayment plans
There are certain income-driven repayment plans that have a lower monthly payment for borrowers that file married filing separate. The loan savings compared to the tax costs may be substantial in some cases. Conversely for some, there may be no net savings if you have a lower loan payment and higher taxes.
If you or your spouse have a large amount of student loan debt, and you’re using the income driven repayment plans, you may want to seek a local tax professional’s assistance to calculate the net savings from married filing separately with lower loan payments.
Further, in 2025 or 2026, this may very likely change with current legislation, meaning the income-driven repayment plans don’t have differing payment amounts based on filing status. If this happens, taxpayers who have been filing separately to save money on their student loan repayments will want to consider returning to filing a joint return.
You can file separately for any reason
As mentioned earlier, this is not an exhaustive list of all the reasons a couple may choose to file separate tax returns. There are many that have not been listed. So, whether it’s simply you and your spouse prefer maintaining separate finances or maybe one spouse has decided they don’t want to file joint tax returns anymore, filing separately is always an option.
Using married filing separately is an option that can also be reversed with an amended return any time within 3 years from the original due date of the return (not including extensions). However, if you file a married joint return, you will not be able to change the filing status on an amended return once the tax deadline for that year has passed.