Tax File Status

[PINKNation]

My husband and I don’t live in the same house. If we share money is it best to file separate or jointly? 

[Anonymous]

Hello my friend, thank you for your question.

It all depends on your situation to file Married Filing Jointly or Married Filing Separate.  

The rule is that if you are legally married and not living together the whole year, you should file Married Filing Separate.   You also have to take into account the communit property allocations and adjustments if you live in a community property state.  (Please see https://ttlc.intuit.com/turbotax-support/en-us/help-article/taxation/married-filing-separately-commu...)

The IRS allows you to file Married Filing Jointly even if you do not lived together.  It is actually a choice from both of you because you both will be responsible for the taxes.

But, if you are legally married and not living together more than half of the year and you have a dependent qualify child, you can file Head of Household.  As Head of Household, you qualify for Earned Income Credit and child tax credit and your Standard deduction is higher than Married filing Separate.

The advantage of filing jointly is that you get a higher standard deduction, and your taxes are less.  The disadvantage of filing Married Filing Separate is that you cannot claim the following credits.

- Educational benefits

- Earned Income Credit (EIC)

- Child and Dependent Care Credit

- Adoption Credit

- The following deductions are reduced by half

    - Itemized deductions

    - child Tax credit

    - Capital Losses

- If you are using the standard deduction then your spouse must use the standard deduction too.  If you are itemizing, then your spouse must itemize too.  

I hope this answered your question

Thank you  so much

Martha

[EleanoreS]

Good day PINKNation,

As long as you are legally married on the last day of the year, December 31; you can choose to file either married joint or married separate.  It does not matter if you do not live in the same house.

It is generally more beneficial to file married joint.  However, keep in mind you are both liable for any tax liability that arises from the tax filing.  Married filing separate generally results in a higher tax liability as rates are higher and some credits can't be taken.  Ultimately, you need to make a decision based on your circumstances.

This article gives a great overview of whether you should file joint or separate 

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