Married Filing Separately: How Itemized Deductions Work

Married Filing Separately usually reduces credits and increases complexity, but it can help if spouses need separate liability protection or if one spouse has a much lower AGI and very high deductible medical expenses. You should also consider other Married Filing Separately itemized deductions before filing.

This guide breaks everything down so you can decide whether to claim itemized deductions or use the standard deduction to reduce your taxable income.

Want to compare your options fast? Visit our Married Filing Separately Guide.

What Itemized Deductions Mean When You File Separately

Itemized deductions let you list eligible expenses instead of taking the standard deduction. These deductions typically include mortgage interest, state and local taxes, and certain medical expenses.

When you file separate returns, a key rule applies:

• If one spouse itemizes, both spouses must itemize.
• If one spouse takes the standard deduction, both must take it.

You cannot mix and match. This uniform treatment prevents one spouse from itemizing while the other claims a larger standard deduction.

This rule matters. If one spouse has very few deductions, MFS may force them to itemize—even if the standard deduction would have reduced their taxable income more.

Source: IRS Pub. 501, MFS Special Rules

Deduction Comparison Chart: MFS vs MFJ

Here is a quick comparison of how major deductions differ under both filing statuses:

This chart shows why MFS often results in lower standard and itemized deduction amounts than filing jointly. Still, MFS is the better filing status option when spouses have very different medical bills, separate property, or separate sources of income.

Medical and Dental Expenses Under MFS

Medical and dental expenses are deductible to the extent they exceed 7.5% of the taxpayer’s Adjusted Gross Income (Schedule A rules). For MFS, each spouse uses their own AGI, so a lower-income spouse with high unreimbursed medical costs may be better off itemizing separately.

H3: Example: How the 7.5 Percent Threshold Works

Scenario:

If they file jointly:

If they file separately:

This is one of the few areas where MFS can unlock tax deductions unavailable under MFJ.

We recommend maintaining records documenting who paid the expense. Be sure to keep receipts and proof of payment (bank statements, cancelled checks) to show who paid the expense.

Source: IRS Pub. 502, Medical Expenses

State and Local Taxes (SALT) When Filing MFS

The SALT deduction covers:

• State and local income taxes
• Property taxes
• Real estate taxes
• Personal property taxes

Most taxpayers know the SALT limit is $40,000. Under MFS, the limit is $20,000 total. This limit applies to combined income taxes and property taxes paid by either spouse.

Source: IRS, How to update withholding to account for tax law changes for 2025

Learn how to split property tax deductions correctly.

Joint Funds vs Separate Funds

• Payments from a joint account are usually treated as being made by both spouses.
• Payments from separate funds belong to the spouse who paid them.
• In community property states, funds are often split evenly unless you can trace separate property.

Mortgage Interest: Who Gets the Deduction

Mortgage interest is deductible only if you itemize and meet the rules for mortgage interest (see IRS Publication 936 and Schedule A instructions). Who claims the interest depends on who actually paid it and on state property law.

In common-law states, the payer generally claims the deduction; payments from joint accounts are often treated as shared unless you can trace separate funds. In community property states, you may need Form 8958 to allocate amounts between spouses.

If you claim an allocation that differs from the bank’s reporting (Form 1098), keep all your records and Form 1098 documentation.

Find out who gets to claim the mortgage interest deduction.

H3: Example: Splitting Mortgage Interest

Total mortgage interest: $8,400

IRS presumption:

• Spouse A: $4,200
• Spouse B: $4,200

If Spouse A used $6,000 of separate funds for the payments, they may be able to claim $6,000 instead.

In complex situations, it is wise to seek help from a tax preparer.

How Joint Accounts Affect Your Tax Deductions

Joint accounts simplify daily finances, but complicate MFS tax returns. The IRS typically assumes that payments from a joint checking account were made equally by both spouses.

This affects:

• Mortgage interest
• SALT
• Property taxes
• Medical expenses
• Other itemized tax deductions

Example: Joint Account Payments

If $3,000 in medical bills were paid from a joint checking account, the IRS usually splits the deduction unless you can trace separate funds.

Track:

• Who paid
• Which account
• Whether the money was community or separate property

This helps you claim the correct amount on your separate tax return.

Community Property State Rules for Itemized Deductions

In community property states, income and deductions are often split evenly between spouses, even on separate tax returns.

States include:

• California
• Arizona
• Texas
• Nevada
• Louisiana
• Washington
• Idaho
• New Mexico
• Wisconsin

States that allow couples to opt into community property laws:

• Alaska
• Florida
• Kentucky
• South Dakota
• Tennessee

Learn how to allocate community property income when filing separately.

How Community Property Affects Deductions

• Income taxes, property taxes, and mortgage interest are typically split.
• Payments from community funds remain community property.
• Payments traced to separate funds remain separate.

Example: Splitting Interest and Taxes

Mortgage interest: $5,000

Allocation:

• Spouse A: $2,500 interest + $2,000 property taxes
• Spouse B: same amounts

If one spouse paid using separate funds, the allocation might change, but you must be able to trace the payment.

When Itemizing Deductions Makes Sense Under MFS

Itemizing may be beneficial when:

• One spouse has large medical or dental bills
• One spouse owns separate property
• One spouse has a lower AGI
• Mortgage interest paid by one spouse is significant
• SALT exceeds the standard deduction

But if itemizing doesn’t offer meaningful savings, both spouses may save time by taking the standard deduction.

A tax preparer can help confirm whether itemizing or using the standard deduction is best for your situation.

Conclusion

Itemizing deductions under the Married Filing Separately status requires careful planning, documentation, and understanding of community property rules. Knowing how mortgage interest, medical bills, SALT, and joint account payments are treated helps you correctly claim Married Filing Separately itemized deductions and decide whether to itemize or take the standard deduction.

File your taxes today!