Married Filing Jointly vs. Married Filing Separately?

It's almost always better to file MFJ than MFS - though it does depend on your personal situation.

One of the most common reasons for filing MFS is liability: either you don't trust your spouse or your spouse may have a tax liability that you don't wish to be responsible for. And no, I'm not kidding.

But assuming that doesn't apply to you, MFJ tends to be economically better for most married folks. Tax rates tend to be higher for MFS (they are more compressed) than MFJ - or singles, for that matter. Additionally, you lose a number of credits and deductions that might otherwise be beneficial. Phaseouts for items like IRAs tend to be lower (a bad thing, this means that you may not qualify if your incomes are higher).

The single most important determining factor for most couples, however, is itemizing. If you file MSF, each spouse must agree to itemize or take the standard deduction - you must make the same choice. One spouse may not opt to itemize and the other take the standard deduction. This could result in your losing the ability to claim mortgage deductions and more.

And oh yeah, you also have to file two tax returns. Really, you want to do that?