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The IRS considers taxpayers married if they are legally married under state law, live together in a state-recognized common-law marriage, or are separated but have no separation maintenance or final divorce decree as of the end of the tax year.

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Of the 150.3 million tax returns filed in 2016, the latest year for which the IRS has published statistics (at the time of writing), 3.07 million belonged to twosomes who filed separately.

  • These partners reported individual income and expenses on individual tax returns.
  • They had to agree on either itemizing expenses or using the standard deduction.
  • By filing separately, their similar incomes, miscellaneous deductions or medical expenses likely helped them save taxes.

Filing separately with similar incomes

A couple may pay the IRS less by filing separately when both spouses work and earn about the same amount.

  • When they compare the tax due amount under both joint and separate filing statuses, they may discover that combining their earnings puts them into a higher tax bracket.
  • Their savings depends on a variety of other factors, however, including their investment situation and whether they have children.
  • The "married filing separately" status cuts the deductions for IRA contributions and eliminates child tax credits, among other tax breaks.

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Using miscellaneous deductions by filing separately (for tax years prior to 2018)

Miscellaneous deductions can lower taxable income, but in order to enter them on Schedule A, they must add up to more than 2% of adjusted gross income (AGI).

  • Spouses with union dues, job-search costs, tax-preparation fees and un-reimbursed business expenses may find their miscellaneous deductions don't qualify when their higher combined income raises their AGI.
  • A spouse who travel frequently for business could rack up a sizable tally in airline fees for baggage and itinerary changes that makes the miscellaneous deduction worth pursuing.

Beginning in 2018, these types of miscellaneous expenses are no longer deductible.

Filing separately to save with unforeseen expenses

Adjusted gross income also determines if a couple can use un-reimbursed health care costs and casualty losses on Schedule A to save taxes.

  • Unless out-of-pocket medical expenses exceed 7.5% of AGI for 2019 and 2020, they don't qualify as a deduction.
  • Casualty losses must also total more than 10% of AGI and occur in a federally declared disaster area.

The spouse with the loss or substantial medical outlay calculates deductibility against his or her own lower AGI when the couple files separate returns. When one spouse can lower taxable income this way, married filing separately might trim a couple's overall tax burden.

Filing separately to guard the future

When you don't want to be liable for your partner's tax bill, choosing the married-filing-separately status offers financial protection: the IRS won't apply your refund to your spouse's balance due. Separate returns make sense to prevent the IRS from seizing a spouse's tax refund when the other has fallen behind on child support payments.

Couples in the process of divorcing may shun joint returns to avoid post-divorce complications with the IRS, while a spouse who questions her partner's tax ethics may feel more comfortable living a separate tax life.

All couples living in community-property states must consider state law when deciding how to file.