There are three (3) options to file for married couples.
Most favorable and common is Married Filing Jointly. By filling Married Filing Jointly couple gets higher standard deduction- $12,600 in 2015.
If couple is married, but chooses to file Married Filing Separately, both spouses will have to file separate tax returns to report their own individual income, deductions, credits and exemptions. This way spouses responsible only for their own individual tax liability, and not responsible for any tax liability result from spouse’s tax return. If you chose to file MFS ( Marries Filing Separately), your certain deductions and credits are being limited, such as:
– If one spouse itemizing, the other one has to itemize to or claim “0” as a deduction. ( You cannot chose a standard MFS deduction)
– If both spouses claiming standard deduction, it will be 1/2 of what it would be on a joint tax return -$6,300.00 for 2015
– No Earned Income Credit is allowed
– No Educational tax credit – no America Opportunity or Life Learning credit, no tuition or student loan deductions
– Savers Credit is limited
– Child tax credit is limited
If you live in a community property state, it gets a bit more complicated as you need to report 1/2 of your community income and deductions in addition to your own income and expenses.
There is 3rd option when IRS consider you an “unmarried” because you lived apart from your spouse and meet certain test and can file as Head of Household. This can happened even if couple still legally married and not legally separated.
In any case contact your tax professional, so you can determine what is correct and most advantages filling status for you.