A spouse can never be claimed as a dependent. If you are going to file as Married Filing Separately you can claim the personal exemption for your spouse if they:
- Had no gross income,
- Isn't filing a return, and
- Wasn't the dependent of another taxpayer.
You would not need to file a Form 8379 for injured spouse if you file as Married Filing Separately or Head of Household.
If you are legally married and you lived with your spouse at any time in the last six months of the year you cannot have Head of Household filing status.
You cannot have a filing status of Married Filing Separately and Head of Household.
The following are the filing status and standard deductions for 2016 -
- Single - $6,300 add $1,550 if age 65 or older
- Married Filing Separately - $6,300 add $1,250 if age 65 or older
- Married Filing Jointly - $12,600 add $1,250 for each spouse age 65 or older
- Head of Household - $9,300 add $1,550 if age 65 or older
You would want to file as Married Filing Jointly even if one spouse has little or no income. You receive the highest standard deduction of $12,600 and you each receive a personal exemption of $4,050. You can continue to file the injured spouse Form 8379 so any tax refund will not be seized for the debts of your spouse.
Generally, filing jointly will give you a bigger refund or less taxes due. When you file separately, your tax rate is higher and you won't be able to claim:
- Education benefits
- Earned Income Credit (EIC)
- Child and Dependent Care Credit (usually)
- Adoption Credit (usually)
- The same benefit married filing jointly couples get for personal exemptions, itemized deductions, the Child Tax Credit, and capital losses (all of these deductions are reduced by half)
- The standard deduction if your spouse is claiming itemized deductions.
On top of that, if you live in the community property states of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, you have to deal with community property allocations and adjustments, which adds extra work and complexity to your tax preparation chores.