How will filing of marital separation affect President Trump’s tax cuts?

Each year, couples decide whether to file taxes jointly or separately. The choice could have new implications for taxes in 2025 as changes in President Donald Trump’s “Big and Beautiful Bill” become law.

Tax laws generally favor the status of “married filing jointly,” which combines a married couple’s income, deductions, and deductions on a single return. When married couples file separately, income and tax relief are allocated to each spouse and two returns are prepared.

“I’ve seen a few cases where it makes sense for couples to file separately, but it’s usually a very specific, numbers-based decision rather than a broad strategy,” said financial planner Gregory Guenther, owner of GrantVest Financial Group in Matawan, New Jersey.

More than 55.5 million married couples chose to file jointly during the 2023 tax year, compared to about 4.1 million couples who filed separately, according to the latest IRS data.

Joint filers typically pay less income tax because they have a wider tax bracket. This means that couples can earn more before reaching the next stage. There will also be a higher standard deduction worth $31,500 for married couples filing jointly in 2025, compared to $15,750 for married couples filing separately.

Filing separately can have “unintended consequences,” said Lawrence Pong, a certified financial planner at Pong & Associates, an advisory firm in Redwood City, California.

For example, married couples no longer qualify for deductions on Roth individual retirement account contributions or traditional IRA deposits once their modified adjusted gross income reaches $10,000.

Additionally, they may not qualify for certain tax breaks that were popular with many filers this season, including Trump’s new deductions for tip income, overtime pay and senior citizens.

Filing separately could also block or reduce existing tax breaks, such as the student loan interest deduction, education credit, and child and dependent care tax credit.

Experts say there are downsides to filing separately, but the option could pay off for some taxpayers this season depending on their circumstances.

Some high-income couples living in high-tax states may be able to improve their itemized deductions by filing separately, Gunter said.

This could include President Trump’s bill increasing the federal deduction limit (SALT) for state and local taxes to $40,000 ($20,000 for individual filers) by 2025.

Another example is when one spouse qualifies for a medical expense deduction. This is another itemized tax deduction that only applies if your medical expense deduction exceeds 7.5% of your adjusted gross income for the year.

But experts say filing separately, which requires both spouses to itemize or take the standard deduction, may not be beneficial for both parties.

“It’s rarely a slam dunk,” Gunther said.

Of course, advisors should perform tax projections for both joint and separate filing methods to see which option yields better results. It can vary from year to year.

Generally, “marital separation filings are more of a tactical move for a particular year than a long-term strategy,” Gunter said.

“It only makes sense if the benefits are clear and measurable,” he said.