Albert E. Bergen, CPA

Married Separately vs Married Jointly

Married taxpayers have the option of filing separate returns (with the status of Married Filing Separately, or MFS) or joint returns (Married Filing Jointly, or MFJ). Taxpayers are often unsure of which filing status will give them the best result, and there’s a common belief that filing separately is better than filing jointly. Under current tax law and in most common situations, the opposite is generally true. Married taxpayers who file joint returns tend to pay the same or less tax than they would if they filed separate returns.

To understand why, it’s important to consider the tax tables for joint and separate filers as well as some of the the special rules that apply to married taxpayers.  The 2013 tax rate tables for married taxpayers filing separately and filing jointly are provided below:

 

 Tax Tables – Joint and Separate

MFS MFJ
Taxable Income Rate Taxable Income Rate
$0 to $8925 10.0% $0 to $17,850 10.0%
$8,926 to $36,250 15.0% $17,851 to $72,500 15.0%
$36,251 to $73,200 25.0% $72,501 to $146,400 25.0%
$73,201 to $111,525 28.0% $146,401 to $223,050 28.0%
$111,526 to $199,175 33.0% $223,051 to $398,350 33.0%
$199,176 to $225,000 35.0% $398,351 to $450,000 35.0%
$225,001 and over 39.6% $450,001 and over 39.6%

The tax brackets for joint filers are twice as wide as the tax brackets for married taxpayers filing separately.  At first glance, it would appear that filing separately is no worse than filing jointly, but that is only true when both spouses would be in the same tax brackets on their separate returns.

 

Filing Status Comparison

The table below compares joint and separate filing status for a married couple where there primary wage earning earns $60,000 and their spouse earns $30,000.  They have no children, no other income, and they are claiming the standard deduction.

Spouse 1 Spouse 2 Total Joint
Income      60,000      30,000      90,000      90,000
Standard deduction      (6,100)      (6,100)    (12,200)    (12,200)
Exemptions      (3,900)      (3,900)      (7,800)      (7,800)
Taxable Income      50,000      20,000      70,000      70,000
Tax         8,429         2,554      10,983         9,608

This is a fairly common scenario, and the married taxpayers are already giving up $1,375 if they file separately rather than jointly.  With a larger difference in incomes between spouses, the difference in tax between the two filing statuses could be $10,000 or more.

Although there are times when filing separately will yield a lower tax, the most common reasons to file separately are not tax related.  Couples who are newly married, or couples who have had a rough patch may have filed separate returns because they simply weren’t comfortable with having merged finances.

Fortunately, married couples who have filed separately in recent years may be able to amend those returns and elect to file jointly instead.  Taxpayers can change from married filing separately to married jointly on an amended return filed within three years of the separate returns’ original due-date.  As of this post, tax returns for 2010, 2011, and 2012 may still be amended and, 2009 returns can be amended if the original returns were filed on extension.

 

 Resources

IRS Filing Status Tool

Form 1040 (Tax Tables), Tax Table and Tax Rate Schedules

photo credit: MTSOfan via photopin cc


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