One of the most important choices married couples face during tax season is whether to file Married Filing Jointly (MFJ) or Married Filing Separately (MFS). The decision impacts deductions, credits, and overall tax liability. For 2025, the standard deduction, SALT cap, and medical expense floor are critical factors to evaluate before making your choice.
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Standard Deduction in 2025
For the 2025 tax year:
- Married Filing Jointly (MFJ): $29,200
- Married Filing Separately (MFS): $14,600
Filing jointly nearly doubles the standard deduction, making MFJ the better option for most couples. However, certain circumstances may still favor separate filing.
State and Local Tax (SALT) Deduction
The SALT deduction cap remains $10,000 for 2025. Couples filing jointly share the same $10,000 cap, while those filing separately are each limited to $5,000. This makes MFJ more beneficial in high-tax states, unless filing separately provides other advantages.
Medical Expense Deduction: The 7.5% Floor
For 2025, unreimbursed medical expenses exceeding 7.5% of Adjusted Gross Income (AGI) are deductible. Filing separately can sometimes help one spouse qualify for this deduction if their income is significantly lower, reducing the 7.5% threshold.
When Filing Separately Makes Sense
- One spouse has significant medical expenses or miscellaneous deductions.
- One spouse is subject to student loan repayment income-driven plans.
- Liability protection if one spouse has tax debt or compliance issues.
Drawbacks of Filing Separately
Choosing MFS often comes with trade-offs:
- Loss of key credits like the Earned Income Tax Credit.
- Reduced eligibility for education credits (AOTC, LLC).
- Limited deduction for IRA contributions in some cases.
Example: Joint vs. Separate
John and Maria have $25,000 in combined SALT payments and $12,000 in medical bills. If they file jointly, they deduct $10,000 SALT and may not exceed the 7.5% AGI threshold for medicals. If Maria earns far less, filing separately could allow her to claim more of the medical deduction, but she would lose access to valuable credits.
Key Takeaways for 2025
- MFJ maximizes deductions and credits for most taxpayers.
- MFS can help in unique cases involving medical expenses or liability issues.
- Always run the numbers both ways to determine the lowest tax liability.
