Filers usually pay more total taxes filing separately than filing jointly. Yes he can claim his son and she can claim her children on Married Filing Separately tax returns. There are credits that each of them may lose including the Earned Income Credit, American Opportunity Credit for education expenses, and they will each only get 1/2 of the child tax credit for children under age 17 that they would have received had they file Married Filing Jointly. If one chooses to itemize deductions rather than take the standard deduction, both must take itemized deductions. If this is the only way for them to agree to file, these are most of the consequences.
By the way, it is almost always better just to start a new thread rather than tack on to an old thread.
