What Credits Do I Lose When Filing Married Filing Separately?

You might want to file separately if you want to be responsible for just your income and taxes. Filing a separate return makes it possible to claim certain deductions that lower your tax bill. Of course, the tax system does have those built-in breaks for married people. Depending on your circumstances, the credits you lose access to when you file separately might not matter at all.

Education Credits

Filing separately when you have college expenses means you lose access to both education credits, the American Opportunity Credit and the lifetime learning credit. The hit to your education costs extends beyond credits if you file separately. You also can't deduct tuition and fees. If you're finished with school but still paying off your student loans, filing separately means you can't deduct the interest.

Child Care Credit

Filing a separate return also means you can't claim the child and dependent care tax credit. You can usually get it if you paid for the care of a child under age 12 or a dependent adult who can't care for himself. There is an exception to the rule, though. The IRS doesn't consider you married if you didn't live with your spouse for the last six months of the year. If that's the case, you can file your own return and take the credit.

Adoption Expenses Credit

The adoption credit is the largest credit you can claim from the IRS, but only if you adopt a child during the year and only if you file a joint return if married. It's usually off-limits to those who file separate returns. As with the child care credit, the IRS doesn't consider you married if you live apart from your spouse for the last six months of the year. You also have to provide half the support for the adopted child.

Saver's Credit

You don't fully lose the retirement savings contributions credit, or Saver's Credit, when you file a separate return. But the income limit for a person who files a separate return is half that for a couple filing a joint return. As of 2012, the couple's limit was $55,500. When you file separately, you can only get a credit of up to $1,000. Joint filers can get up to $2,000.

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