Maximizing Tax Savings: Is Separate Filing Right for Married Couples?

ARTICLE | June 25, 2024

Authored by Vasquez + Company

While most married couples file joint tax returns, there are scenarios where filing separately may be beneficial. This article explores the circumstances under which separate filing can be advantageous, such as concerns over a spouse's tax issues, significant unreimbursed medical expenses, qualified business income (QBI) deductions, and student loan repayment plans. It also highlights the importance of analyzing the impact on tax liability before making a decision.

Key Points

  • Liability Concerns: Filing jointly makes both spouses equally liable for the tax on combined income, while separate returns limit liability to individual income.
  • Medical Expenses: Separate filing may be advantageous if one spouse has significant unreimbursed medical expenses.
  • QBI Deduction: Filing separately can help retain the QBI deduction if one spouse's income is below the threshold.
  • Student Loan Repayments: Some income-driven repayment plans for student loans may benefit from separate filing.
  • Tax Breaks: Some tax benefits are only available when filing jointly, so careful analysis is needed.

For more information, read the full article here.