Even though filing taxes jointly could save you a lot due to a number of reasons, but you may still want to file a separate tax return from that of your ex-spouse. This can be done even whether or not you are also undergoing a divorce. Even though there are some disadvantages to filing your tax returns separately, the decision is up to you whether you want to do so. An example of a disadvantage would be if one itemizes deductions from their tax the other cannot use that standard deduction.
There are several other things that can affect the taxes. Here is a guide for filing your taxes after marital separation.
- You and your spouse should have separate income declared for tax purposes, which is applicable especially when you reside in a state that recognizes community property. This is the law determined in your state that the income you declare for tax purposes be separated and you should be specific in reporting the income only from you.
- You should equally divide the expenses paid with joint funds. Doing so, you should also divide the deductions you have itemized between both of you depending on the expenses if they were paid with your own funds or were paid with jointly owned funds.
- The basic standard deduction will be used if your shares of the itemized deductions are of a lower amount than your spouse. The standard deduction will also be required to be used by your spouse which is half the allowed standard deduction for joint returns.
- In most cases, certain credits like credit for earned income, credit for child and dependent care expenses, and the credit for higher education expenses are those you cannot take. Also, try to limit your capital loss deduction from the $3,000 allowed to $1,500 instead from the joint return filers.
- You may be qualified for household head status if your status is already considered "unmarried" by the end of the year. You will be required to pay more than half the costs of home upkeep for a whole year or have someone qualified living with you. Your tax advantages will entail a lower tax rate, the right to claim credits for income earned, and dependent care. You are also entitled to a higher standard deduction. The higher standard deduction would still increase even if your spouse itemizes it. Another qualification would be a dependent parent who does not live with you.
Other advantages of filing a separate tax return include:
- Medical expenses - If one spouse exceeds 7.5 percent of his/her adjusted gross income from non-reimbursed medical expenses, it could result in higher overall deduction if the deductions are itemized in separate tax returns.
- Tax fraud by one spouse - If a spouse suspects the other to be involved in tax fraud then the uninvolved/clean spouse who has a separate tax return will be protected from the liability of the suspected spouse.