- You and your spouse are in the process of divorcing, and are legally separated. If you don't trust one another, it may make sense to file separately, limiting your tax liability to only the items for which each of you are legally responsible. If you can't seem to cooperate long enough to prepare and file a joint tax return, it probably also makes sense to file separately. If one party is completely non-compliant when it comes to filing tax returns, the other spouse is better off filing a separate return in order to meet her or his obligations regardless of what the other spouse does.
- It may make sense to file separately if both spouses are itemizing deductions and one has high medical expenses compared to her or his income. Medical deductions are only deductible if they exceed 7.5% of income, and a spouse with low income and high medical expense may therefore benefit from filing separately.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.