Married Filing Separately in Washington

A Strategic Tool in a Community Property Landscape

In Washington, a community property state, filing separately isn’t just for couples in transition. It’s a strategic planning tool that can help protect assets, manage cash flow, and support long-term financial goals.

At GO, we help clients use this filing status intentionally, turning complex tax rules into clear, confident decisions aligned with legal and financial priorities.

What Makes Washington Different

Washington’s community property laws create unique filing requirements, meaning:

Income earned during marriage is shared: typically, split 50/50 between spouses
Inherited or pre-marital assets may remain separate: if properly documented
Filing separately doesn’t isolate income: special allocation rules apply

IRS Publication 555 outlines the basics, but strategic filing in Washington takes much more than following a form.

These rules affect how income, deductions, and credits are reported and they open the door to meaningful planning opportunities.

When Filing Separately Makes Strategic Sense

Many clients consider Married Filing Separately (MFS) when navigating life and financial transitions.

Life Transitions: divorce, legal separation, or financial restructuring
Income Optimization: student loans, medical expenses
Asset Protection & Autonomy: inherited property, separate assets, risk-managed cash flow between spouses
Mixed Citizenship Households: simplify filing when one spouse is a nonresident alien

Planning Tip: MFS isn’t always about lowering taxes. It’s about aligning your filing status with your legal, emotional, and financial goals.

Key Considerations

MFS can be powerful but it comes with trade-offs. Here’s what to watch for:

Credits limited or disallowed: earned income tax credit, child and dependent care credit, most education credits
No student loan interest deduction
IRA/Roth contributions may be limited or disallowed depending on income
Tax Rates: Higher rates may apply, but often offset by lower AGI or cash flow savings (e.g., medical expense deduction, student loan repayments)
Form 8958 required to allocate income/deductions
Community property rules stay in effect until divorce is finalized. Washington recognizes legal separation as an endpoint for community property

Our team ensures your filing strategy supports both tax and financial goals—no surprises.

Why Talk to Your Tax Advisor About MFS

Because MFS touches multiple areas of your financial life, it’s worth a deeper conversation. Here’s what strategic planning can unlock:

Advanced Planning Opportunities: cash flow optimization, tax-efficient planning
Complexity Handled: community income rules, proper documentation
Risk Mitigation: avoid misreporting, protect separate assets
Cross-Disciplinary Collaboration: coordinate with your attorney and financial advisor
Tailored Client Solutions: aligned with your life, your goals

Every household is different. At GO, we ensure that filing status, wealth protection, and legacy planning work together—not in silos.

Writer: Diem Bui, CPA, EA, MBA – Tax Manager

References

IRS Publication 555: https://www.irs.gov/pub/irs-pdf/p555.pdf

Washington RCW 26.16: https://app.leg.wa.gov/rcw/default.aspx?cite=26.16

Recent Case: In re Marriage of Short, Wash. Sup. Ct. (2024) – affirmed post-separation income allocation rules:

https://www.courts.wa.gov/opinions/pdf/1023553.pdf

https://law.justia.com/cases/washington/supreme-court/1995/61176-9-1.html