While the IRS has evened up some of the items such as tax rates to be equal whether filing jointly or separate, there are many credits and deductions that are greatly limited when filing Married Filing Separate status. The types of items you will lose out on are:
- Education Credits and Deductions
- Student Loan Interest Deduction
- Rental real estate deductions to offset other income
- Child and Dependent Care Credit
You also will be affected by how your spouse files, even though you do not file together. For example, if one spouse itemizes deductions the other spouse must also itemize, even if they do not have anything to deduct. Some states also are community property states where technically all income and expenses should be split equally, minimizing the advantages of filing separately.