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<<Are the circumstances really that rare? We have been filing separately because by doing so I can take advantage of the 2% floor for miscellaneous deductions (mostly unreimbursed job-related expenses). Spouse normally doesn't have significant miscellaneous deductions so we wouldn't meet the floor if we filed jointly. We save perhaps fifty to a hundred dollars in taxes this way--- not big bucks but why give it away? I have computed the taxes both ways so I know it is true. >>

And this is one of the unique situations that I am really referring to. This, again, assumes that you are preparing the returns correctly, given your state of residence and your state laws regarding holding property. It really does matter.

<<We have never come anywhere close to the 7.5% floor for medical (thank the deities), but I have read that in cases where, for example, children have significant med. bills that reach the 7.5% floor, it can be advantageous for one spouse to pay all of those bills, file separately, and claim the medical deduction. Since many people do not have good medical insurance, and even run-of-the-mill childhood illnesses can rack up the bills, I would not think this would be a totally uncommon situation.>>

And that is another rather unique situation. But it won't work (or will the situation noted above) in a community property state where all income is community income and all expenses are community expenses. Then the income and expenses have to be divided right down the middle...and the miscellaneous expenses and/or medical expenses are likely lost again.

<<Although I've never run the numbers to check, I have heard these strategies work best when both spouses have similar incomes-- but that happens a lot these days. >>

But again...it also depends upon a number of other factors...again dealing with your state of residency.

<<My point is I don't think MFS should be easily dismissed as a possible advantageous option for happily married couples. People should take the time to run the numbers both ways.>>

I agree...don't necessarily dismiss that filing status. But even more important, they should be aware of how the law works and HOW to run the numbers both ways. It's not as easy as saying "this is mine and this is yours". It just don't work that way. If you are interested, IRS Publications 501 and 555 should be required reading for anybody considering filing using the married-separate status.

TMF Taxes
Roy
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