Tax Time: When Married Filing Separately Will Save Your Taxes?

The IRS considers the married taxpayers, whether they are married legally under the state law, live together under state recognized law marriage or they are separated but have no separate maintenance or final divorce as of the end of the tax year. Filing the tax separately after marriage is increased, where the partners reported individual income and their individual expenses on their tax returns. They need to accept either itemizing the expenses or to use the standard deduction. When filing separately, the similar incomes, medical expenses or miscellaneous deductions saved their taxes to a great extent.

Filing separately with related incomes 

By filing separately, a couple can pay less to the IRS when both of them work and earn the same income. When comparing the tax due amount under both separate and joint filing status, the combined earning keeps them in higher tax bracket. The savings of the couple is based on various factors, which includes investments and plans for children. While filing separately, it cuts the deductions for IRA contributions and removes child tax credits among other taxes.

Using miscellaneous deductions for filing separately 

Miscellaneous deductions may decrease the taxable income, but when you need to enter them on Schedule A, they should sum up to 2 % or more of Adjusted Gross Income (AGI). Couples having job-search costs, union dues, unreimbursed business expenses, and tax preparation fees can find the miscellaneous deductions that do not qualify if their increased combined income raises their AGI. When a spouse travels more frequently through the air can rack up a sizable tally in fees of the airline for the baggage and itinerary changes, which makes the miscellaneous deduction worth.

Saving with unanticipated expenses

When a couple uses unreimbursed health care costs and casualty losses on Schedule A in saving the taxes is determined by the adjusted gross income. When the medical expense does not exceed the 10 % of AGI, they do not qualify for the deduction. Even the casualty losses total should be more than 10 % of AGI. The spouse with substantial medical outlay or loss calculates deductibility against his or her own, lower AGI if any of the couple file separate returns. When one of the couples might decrease the taxable income this way, married filing separately can cut back a couple’s overall tax.

Guarding the future

When you do not want to take the responsibility of your partner’s tax bill, you can choose the married filing separately option, which offers financial protection. Here, the Internal Revenue Service will never apply your tax refund to your spouse balance due. While filing separate returns, it prevents the IRS from clutching a tax refund of the spouse, when the other is behind on child support payments.

When the couples are about to divorce, they may avoid the joint returns. This may avoid the post-divorce complications. But before deciding how to file the returns, all the couples who are living in a community property need to consider the state law.

Stay tuned with Etax1040s to get the latest tips and updates on federal income taxes information! And don’t forget: you can now e-file your annual income taxes on Forms 1040 with