Filing separately will not help. The rules for Married Filing Separately specifically prohibit claiming any education expenses.
The Married Filing Separately filing status is very different than the Single filing status. There are a number of severe restrictions on deductions and credits, and on the amount of IRA contributions that you can deduct, especially if you live together with your spouse.
You can not take the EIC,
You can not take the credit for Child and Dependent Care, in most cases,
You can not take the Education credits/deductions, and there are many other restrictions.
If either of you receive Social Security benefits and you live with your spouse, more of the SS benefit will be taxable, and the person receiving it will have to include the SS benefit in their gross income when determining whether they have to file. If one of you itemizes deductions, the other must also itemize even if they have nothing to itemize.
Before you decide, you should carefully read the restrictions that go with MFS in IRS Pub. 501, at this link:
http://www.irs.gov/pub/irs-pdf/p501.pdfYou should carefully read the limits on IRA deductions in IRS Pub. 590-A at this link:
http://www.irs.gov/pub/irs-pdf/p590a.pdfIn addition, if you live in a Community Property state, there are special rules you must follow for reporting income and expense. For further information on that, see IRS Pub. 555, at this link:
http://www.irs.gov/pub/irs-pdf/p555.pdfand/or the Turbotax FAQ at this link:
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-statesThe question that your daughter has to answer on her tax return is CAN she be claimed, not IS she being claimed. If she can be claimed then she can not claim education expenses.
