For whom is this status for and why it could be beneficial:
Married couples who choose to record their incomes, exemptions, and deductions on separate tax returns.
It can benefit you if you want to be responsible only for your own tax, or especially if a spouse has significant medical expenses or miscellaneous itemized deductions.
If you qualify for head of household status you don't have to use this filing status.
However, filing separately means potentially not being able to take advantage of certain tax benefits offered exclusively to joint filers.
SPECIAL IRS RULES
You usually pay more tax on a separate return than if you use another filing status you qualify for. Following rules apply:
Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
The amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000 on a joint return).
The child tax credit and the credit for other dependents as well as the retirement savings contributions credit are reduced by half at the income levels compared to a joint tax return.
If your spouse itemizes deductions, you can't claim the standard deduction. But if you can claim the standard deduction, only half the amount of a joint tax return is allowed as your standard deduction.
If you lived with your spouse at any time during the tax year you must include in income a up to 85% of any social security or equivalent railroad retirement benefits you received.
This is what you can't do, take, deduct or claim:
Credit for child and dependent care expenses in most cases (only if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit).
Earned income credit unless you have a qualifying child and meet certain other requirements.
Exclusion or credit for adoption expenses in most cases.
Education credits (the American opportunity credit and lifetime learning credit), or the deduction for student loan interest.
Exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
Claim the credit for the elderly or the disabled if you lived with your spouse at any time during the tax year.
