If couple file separately and husband itemizes his deductions, what happens to spouse?

Bob and Susan are married and do not wish to file a joint return — they want to file separately. Now, if Bob itemizes his deductions, what happens to Susan? Does she have to itemize her deductions, too, or can she take the standard deduction?

Married filing separately is a filing status that usually receives poor treatment, and this case is no exception. A married person filing separately may not use the standard deduction if his or her spouse itemizes deductions. So, they must both either itemize or use the standard deduction for married individuals filing separately.

This can really hurt if Susan has itemized deductions of $8,000 and Bob has only $40 worth. Bob will have to forgo the standard deduction if Susan takes the itemized deductions, which is much more than $40. Now, depending on the circumstances in the marriage, this might not bother Susan, but the couple should be aware of it.