WHY are you not filing a joint return ???
Filing separately is usually NOT your best option ...
The Married Filing Separately filing status is very different than the Married Filing Joint or 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:
You should carefully read the limits on IRA deductions in IRS Pub. 590-A at this link:
In 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:
and/or the Turbotax FAQ at this link:
Have you been separated for at least the last six months of 2019? Are the children with you? If that is your situation you can file as Head of Household and still get child-related credits.
You have a legal issue that needs to be resolved probably thru an attorney.
However... how much you make is NOT the issue here. Who the children live with for MORE than 1/2 the year is the crux of the matter. So do you all live together all year ? If you are the custodial parent then file a return claiming the children ... and if the other parent also claims the children the IRS will sort things out which is usually bad for the loser in this battle.
Briefly, there are 5 tax benefits of having a child dependent: Dependent exemption, child tax credit, dependent care credit, head of household, and eligible for EIC.
The tax code assigns all 5 benefits to the parent who has custody more than half the time. Custody is defined as where the child sleeps at night. (If the child is on a sleep over of a camping trip etc, the day is counted toward the parent where the child would have slept if not for the event in question.)
So for the IRS there is no 50% custody, you have to count nights, and one parent will almost always have more than the other. If for some reason the # of days is exactly equal (like in a leap year, 366 days, exactly 183 nights for each parent) then the tax benefits are assigned to the parent with the higher income.
If the divorce decree says that the non-custodial parent (parent with less than 50% time) gets the dependents in a certain year, the custodial parent must fill out and sign a copy of form 8332 and give it to the other parent, this releases the tax benefits to the other parent. However, the form 8332 only transfers the dependent exemption and the child tax credit. Eligibility for Head of Household, Dependent Care Credit, and EIC always stays with the custodial parent and cannot be transferred.
The only way to transfer all 5 tax benefits from one parent to the other parent is to arrange the children's sleeping schedules so that the desired parent qualifies for the particular year.
If you are the custodial parent, then in the years when you give your ex the form 8332 allowing him or her to claim the dependent exemption and child tax credit, you can still qualify for EIC, Head of Household and the Dependent Care benefit. You do this by carefully answering the questions in the dependent interview in turbotax by saying yes you have a dependent, and yes you are signing a form 8332 to allow the ex to claim the exemption. Turbotax will assign a special status to your children of "Non-dependent, use for HOH and EIC".
Your situation is covered in IRS publications 501 and 504, which you should definitely read.