MFJ vs MFS: What Married Couples Need to Know & How the ITIN Fits In
If you’re married to a U.S. citizen or resident, or you both live abroad, or if your U.S. citizen/resident spouse lives in the United States. If your foreign spouse lives outside of the United States, you have two main options when filing your U.S. taxes: Married Filing Jointly (MFJ) or Married Filing Separately (MFS). The choice you make affects your deductions, credits, and tax rates—and if your spouse doesn’t have an SSN, having an ITIN is essential to reduce your taxes based on your filing status on your 1040 Federal tax return.
What’s the Difference Between MFJ and MFS
| Feature | Married Filing Jointly (MFJ) | Married Filing Separately (MFS) |
|---|---|---|
| Tax Bracket | Usually lower combined tax rate; more favorable brackets | Often higher tax rate; fewer benefits in lower brackets |
| Deductions & Credits | Larger standard deduction; access to credits like Earned Income Tax Credit, Education Credits, etc. | Many credits unavailable; limited deductions; higher phase-outs |
| Reporting Requirement | Must report both spouses’ incomes—even foreign income, eligible to apply or can apply for jointly filing, even if no income or does not live in the United States | Each spouse reports their own income; foreign income may or may not need reporting depending on residence & treaty |
| Liability | Both spouses are responsible for taxes, penalties, and interest | Each spouse is responsible only for their own tax liability |
Where the ITIN Comes Into Play
- If your spouse isn’t eligible for a Social Security Number, you can still file MFJ by applying for an ITIN for them via Form W-7.
- The ITIN allows the spouse to be included on a joint return and qualify for benefits like higher deductions or tax credits that MFJ status makes available.
- Without the ITIN (if opting for MFJ), or if filing separately with a spouse lacking SSN/ITIN, the IRS may reject the return or deny credits.
When MFS Makes Sense
You might choose MFS when:
- One spouse has significant deductions or medical expenses; filing separately can limit phase-outs.
- There’s a large foreign income that might trigger higher taxes or complicate treaty reporting.
- There are concerns about responsibility for each other’s tax liabilities (e.g. one spouse distrusts the other’s filings).
- The spouse without an SSN or an ITIN cannot provide the needed documentation, making MFJ harder.
When MFJ Is Usually Better
- If you want access to credits and deductions that are only available when filing jointly.
- When your incomes are more balanced, or one spouse has lower earnings.
- When foreign treaties reduce tax on foreign income, and you want simplicity in filing.
- If you get an ITIN for your spouse in advance, MFJ often gives better tax outcomes.
Final Thoughts
Choosing between MFJ and MFS needs careful thought. MFJ often gives better tax benefits—but only if both spouses can be appropriately identified (via SSN or ITIN) and both incomes reported. MFS can be safer in some cases, but it usually comes with trade-offs.
For professional assistance with the form, treaty benefits, or U.S. tax compliance, contact our team today.
We are one of the IRS Enrolled Agents with many years of experience in US 1040/1040NR personal tax compliance reporting and FATCA Compliance FBAR Reporting. We are happy to assist our clients in a timely, efficient, and cost-effective way.
