Oregon Tax Consultants Practice Exam

If you file as Married Filing Separately (MFS) and one spouse itemizes deductions, what is the tax consequence for the other spouse?

1. They can choose to take the standard deduction

2. They must also itemize deductions

3. They can only claim a personal exemption

4. They are exempt from filing

The correct answer is: They must also itemize deductions

When spouses file their taxes as Married Filing Separately (MFS), there are specific rules that must be followed regarding deductions. If one spouse itemizes their deductions, the other spouse is required to do the same, meaning they must also itemize their deductions. This is an important stipulation within the tax regulations to prevent potential abuses of the system by allowing one spouse to benefit from the greater deduction potential without the other being held to the same standard. This rule ensures that both parties take either the standard deduction or itemize, maintaining fairness in the filing process. Therefore, if one spouse opts to itemize, the requirement for the other spouse to follow suit makes it impossible for them to simply take the standard deduction or enjoy other benefits without adhering to the same deduction choices.