Is it better for a married couple to file jointly or separately?

You are married and living together.

You are living together in a common law marriage recognized in the state where you now live or in the state where the common law marriage began.

You are married and living apart but not legally separated under a decree of divorce or separate maintenance.

You are separated under an interlocutory (not final) decree of divorce.

You get to keep your tax liability separate from each other.

If there is a large disparity in you and your spouse’s income, you will get to pay tax only on your income

If you are legally separated, this is generally a good filing status. 

Sometimes, one spouse has a tax debt that the other spouse does not want their refund being reduced to cover. In those instances, married filing separately could be best.  

Your tax liability is likely to be higher than if you filed jointly.

If one MFS spouse itemizes, then so must the other. Alternatively, if one takes the standard deduction, then both must take the standard deduction

In most cases, you cannot take the child and dependent care credit. If your employer offers child and dependent care assistance, the amount you can exclude from your income is limited to $2,500 instead of $5,000.

The child tax credit and retirement savings contributions credit are reduced at income levels that are half those for a joint return. 

In most cases you cannot take the exclusion or credit for adoption expenses.

You cannot take the earned income credit.

The alternative minimum tax exemption is half of the amount that would be on a joint tax return. 

The capital loss deduction is limited to $1,500 instead of $3,000

You can not take the deduction for student loan interest or credit for higher education expenses such as the American opportunity and lifetime learning credits. If you received interest income from qualified savings bonds used for higher education expenses, you cannot exclude income

If you lived with your spouse at any time during the tax year, according to the IRS:

Married couples who file jointly may receive a higher tax break than filing separately, per the IRS.

Phaseouts (gradual reduction of a tax credit as income approaches the upper limit of the credit) start at higher income levels for Married filing Jointly.

Certain credits such as the Child Tax Credit or Student Loan Interest Deduction may come with an income phaseout where the full credit or deduction is reduced.

Per the IRS, filing MFJ (Married Filing Jointly) may allow for claiming credits such as Education Benefits, Earned Income Credit (EIC), Child and Dependent Care, and Adoption Credit.

The standard deduction for MFJ is $27,700 (2023).

Equal responsibility for the return and any taxes or penalties owed. 

Deductions for Medical Expenses will be limited, especially if they exceed 7.5% of your income.

The refund of one spouse may end up paying for the other spouse’s delinquent debts.