I am a freelancer and my husband is employed. We therefore filing as Married, Filing Separately. Is this disadvantageous? We also have separate households. Should we both file as head of household? (And is that disadvantageous?)
Hi Momosgirl,
There are consequences to filing Married Filing Separately. The largest consequence is that if you are married filing separately, you will move into a higher tax bracket as early as $15,000. That means that your tax burden will be higher if married filing separately. Further, if there are children in the household, you will lose the childcare credit and the earned income credit. The total child tax credit is also impacted. In addition, you will lose the education credit. Finally, if one of you itemize, both will have to.
Usually, this status is used if one spouse does not care to get involved with tax difficulties of the other. If there are no children or education expense then the only concern is the addition tax you will still have to pay.
Finally, Head of household is available if there is a child that lives with you for at least 6 months of the year. Without a dependent, there can be no Head of Household.