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For a couple filing "married filing separately" are there any tax implications in moving money from one spouse's bank account to the other's? Would the IRS see this as "income"? I spent a while searching the IRS publications as well as Google and didn't see any mention of this having any effect on taxes so I guess it's OK?

My spouse and I live abroad and file our taxes "married filing separately", because she is a non-resident with no US income. I am a US citizen, but have no income. The reason we want to transfer the money is because the way our separate accounts are setup it would be convenient to put some of her income in my US accounts.

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My wife and I use to file "married file separately". I consulted a tax accountant and it does not matter who's name the accounts are under. The interest from the accounts can be counted as income on either person's tax return regardless of whose name is on the account. You can even split the interest income between the returns if that is advantageous. This is true for any income earned between the two of you.

It use to be a big hassle to file this way even using the software programs. The programs would not attempt to allocate the income between the tax returns in order to minimize my tax liability. I had to do this manually. Most of the loopholes have been closed and the last couple of years I've filed "married filed jointly".

I'm not sure how your wife's citizenship status affects any of this.

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  • Interesting. I haven't been able to find anything saying there is tax implications of "sharing income" between couples filing MFS. Your data point further supports this.
    – user1175
    Sep 28 '10 at 20:14

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