Some married couples file separate returns because each wants to be responsible only for his or her own tax. There is no joint liability. But in almost all instances, if you file separate returns, you will pay more combined federal tax than you would with a joint return. This is because the following special rules apply if you file a separate return.
- Your tax rate generally will be higher than it would be on a joint return.
- Your exemption amount for figuring the alternative minimum tax will be half of that allowed a joint return filer.
- You cannot take the credit for child and dependent care expenses in most cases.
- You cannot take the earned income credit.
- You cannot take the exclusion or credit for adoption expenses in most instances.
- You cannot take the credit for higher education expenses (American opportunity and lifetime learning credits), the deduction for student loan interest, or the tuition and fees deduction.
- You cannot exclude the interest from qualified savings bonds that you used for higher education expenses.
- If you lived with your spouse at any time during the tax year:
- You cannot claim the credit for the elderly or the disabled, and
- You will have to include in income more (up to 85%) of any social security or equivalent railroad retirement benefits you received.
- Your income limits that reduce the child tax credit and the retirement savings contributions credit are half of the limits for a joint return filer.
- Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
- Your basic standard deduction, if allowable, is half of that allowed a joint return filer.
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