In which situation would you choose Married Filing Separately?

Choosing to file as Married Filing Separately can be beneficial in situations where one spouse incurs substantial medical expenses. This filing status allows the spouse with the medical expenses to potentially deduct more medical expenses, as the threshold for deducting medical expenses is based on a percentage of their individual income.

When married couples file jointly, the combined income may elevate the threshold percentage that applies to medical expenses, thereby making it more difficult to reach the amount eligible for deduction. By filing separately, the spouse with high medical expenses can claim deductions based solely on their income, potentially leading to a greater tax benefit for that individual.

In situations where both spouses earn equal income, combining incomes may result in a higher tax liability overall compared to filing separately. Additionally, if both spouses want to combine deductions, that objective aligns more with filing jointly, which also has the benefit of a higher standard deduction. Lastly, if one spouse earns no income, filing together might still be preferable since it allows the working spouse to benefit from the full range of tax credits and deductions, rather than limiting their taxable income further by filing separately.