Good afternoon, julie_b! Thanks for joining us today!
You asked "would it be beneficial to change to married filing separately, and would my spouse then be able to potentially reduce student loan payments? and, Would the filing status change affect spouse's future social security benefits?"
No, married filing separate is almost never beneficial to a couple, when taking all things into consideration.
The first thing to consider is that the married filing joint status allows for the largest standard deduction of all the filing status' which is $27,700 for 2023. Another significant consideration is the fact that many credits and deductions are not allowed if one elects to file separately, instead of jointly. If your spouse itemizes deductions, you can’t claim the standard deduction and must itemize too, often resulting in a much lower deduction. Also, you will no longer qualify, as married fililing separately, to claim: the dependent care credit, student loan deduction, earned income credit, American Opportuity credit or Lifetime Learning credit, as well as many others. In addition to those not being allowed, the child tax credit and the credit for other dependents and the retirement savings contributions credits have reduced income limitations, to half. Here is a link to help you calculate your outcomes to help compare: How you can compare MFJ to MFS
In terms of the impact on Social Security benefits, if you file as married filing separate, you will have to pay a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you receive.
You will need to reach out to the Social Security Administration if you are needing more information on how this will impact the amounts and eligibility for those benefits. Here is a link for the Social Security Administrations Site:
Social Security Administration
For more information please check out these links:
Is it better to file jointly or separately?
MFJ vs. MFS
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Terri Lynn
