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You are certainly familiar with the tax filing status, either from filing your own tax returns, or from keeping up with our newsletters. And you know that, if you are married, you have the option of filing your tax return jointly or separately. The majority of married couples file joint tax returns, but you should use the filing status that is most beneficial to your specific tax situation.
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If you and your spouse file as married filing jointly, your tax may be lower than your combined tax would be for another filing status. Your standard deduction may be higher, and you may qualify for other tax benefits that do not apply to the other filing statuses.
Under the new final regulation effective as of September 2, 2016, a marriage (same-sex or opposite-sex) will be recognized for federal tax purposes if it is recognized by the state in which the individuals are married, regardless of where the couple is domiciled. Taxpayers may use the married filing jointly status if they are married and both agree to file a joint return. This includes:
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Taxpayers who live together in a common-law marriage recognized by the state where the marriage began (Alabama, Colorado, District of Columbia, Iowa, Kansas, Montana, Oklahoma, Pennsylvania, Rhode Island, South Carolina, and Texas);
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Taxpayers who live apart but are not legally separated;
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Taxpayers whose spouses died during the year and who have not remarried. |
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Both husband and wife must sign the income tax return. Special rules apply when a spouse cannot sign the tax return because of death, illness, or absence.
When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. This is called joint and several liability. Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to income, deductions, or credits of your spouse or former spouse. You remain jointly and severally liable for taxes, and the IRS can still collect them from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax.
Domestic abuse often includes control over finances. An important part of managing finances is understanding one’s tax rights. Taxpayers have the right to expect the IRS to consider facts and circumstances that might affect the individual’s taxes. |
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| Taxpayers have the right to: |
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File a separate return even if they’re married.
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Review the entire tax return before signing a joint return.
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Review supporting documents for a joint return. |
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Refuse to sign a joint return. |
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Request more time to file their tax return. |
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Get copies of prior year tax returns from the IRS. |
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Seek independent legal advice. |
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| Taxpayers also have the right to request relief from the liability shown on a joint return. This is known as innocent spouse relief. |
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Generally, the following conditions are required for you to qualify for the Innocent Spouse Relief:
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You must have filed a joint return which has an understatement of tax;
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The understatement of tax must be due to erroneous items of your spouse (or former spouse);
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You must establish that at the time you signed the joint return, you didn’t know and had no reason to know there was an understatement of tax;
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Determine that the understatement did not bring a significant benefit to you. The deception is not considered a significant benefit simply because your spouse supports you. But if your spouse was handling your investments and lied about them, you significantly benefited because your tax was understated.
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| To request the Innocent Spouse Relief you need to fill out Form 8857 as soon as you know about the tax debt, but no later than two years from the first time the IRS tries to collect the tax debt. |
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| You will know about the tax debt when: |
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The IRS examines or audits your income tax return;
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The IRS sends you a letter; or
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The IRS keeps your tax refund to pay the debt. |
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| Fill out Form 8857 and attach a statement explaining why you qualify. Put your name and Social Security number on the statement. If you request innocent spouse relief for more than one year, file one Form 8857, but for each year do a separate statement that explains why you qualify. Do not file Form 8857 with your income tax return. |
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| The IRS also says that if you file a joint return and all or part of your refund is applied against your spouse’s past-due federal tax, state income tax, child or spousal support or federal non-tax debt (such as a student loan), you may be entitled to Injured Spouse Relief. |
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| To qualify as an injured spouse: |
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You must file a joint return;
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You must have made and reported income such as wages or taxable interest on your joint return;
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You must have made and reported tax payments, either withheld from wages, through estimated tax payments, or by claiming a refundable tax credit; |
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You must not be legally obligated to pay the past due amount (meaning you weren’t married to your spouse when he/she incurred the debt). |
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Under these circumstances you may request your portion of the refund by filing the Injured Spouse Allocation Form 8379.
You can submit Form 8379 along with your tax return and, if you send in a paper return, make sure to write “INJURED SPOUSE” at the top left corner of your 1040.
You can also file Form 8379 by itself, just make sure that you list both your and your spouse’s social security numbers in the same order as they appeared on your income tax return. |
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Only the IRS can determine the amount of tax owed by or overpayment due to each spouse mostly because allocation for couples from the community property states will be different from couples who aren’t in community property states.
Until 1988, the Innocent Spouse Relief was the only option for a married taxpayer to be relieved of a tax liability stemming from their spouse’s errors. Unlike the Injured Spouse Relief, in order to qualify for the Innocent Spouse Relief, you must prove you had no knowledge of the errors leading to a back tax debt when you signed the tax return. |
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While the Injured Spouse may be entitled to receive relief from debt incurred by the other spouse before marriage, the Innocent Spouse may be entitled to relief when the other spouse makes false reports on a joint return.
Most importantly, keep in mind that each case is different and probably require an individual approach, so professional help is certainly the best option for your personal circumstances. |
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