I’m filing Married but Separated due to us separating in the beginning of December. Does my wife also need to file separately? We also have two kids & each claim 1.

[kametoast]

We aren’t legally separated because the state of VA doesn’t allow you to be legally separated but started living separately at the beginning of December. We have two kids together, 1 lives with me and the other with her, so we were going to each claim one.

[xmasbaby0 · Accepted solution]

If you were legally married at the end of 2022 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $25,900 (+$1400 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit. 

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

 If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[Hal_Al]

Yes, she must file as Married Filing Separately (MFS) too.  There is a provision for being able to use Head of Household (HoH) filing status, but you don't meet the rules (you did not live apart the entire 2nd half of the year).

You may want to prepare tax returns both ways (MFJ and MFS) to see the difference.  It usually well worth the effort to try to agree to  file as Married Filing Jointly (MFJ). 

[kametoast]

Will we be able to each claim a child? We have two and have a written agreement where one child would live with me and the other with her.

[Hal_Al]

Q. Will we be able to each claim a child? 

A. Yes, based on what you describe.