‘Til Taxes Do Us Part: Love, Marriage and Joint Tax Returns

In the walk up to the “happily ever after”, the legal stuff is hardly ever mentioned. Aside from the paperwork of changing a woman’s name, the newly married couple will be faced with something even bigger – their first joint tax return. Getting married is highly favored by the tax code. Therefore, filing jointly should generally reduce the amount of taxes owed. There are times where couples qualify for deductions and credits that the individual may not have been able to deduct on their own. But what happens when one spouse owes back taxes, child support, or even student loans debts and has their tax refund withheld? In my experience, couples often go married filing separately. This can be costly when it comes to taxes.

Here are 3 types of relief offered by the IRS that might help married couples get back to filing jointly:

Innocent Spousal Relief – No other way to say it: this is for when a spouse has been misled or lied to about their taxes. This could be because of domestic violence, financial abuse or even that the husband and wife are separated with no knowledge of the other’s taxable events. For this reason, there is Innocent Spouse Relief. Innocent spouse

Injured Spousal Relief – With Injured Spouse Relief, you can claim your portion of the refund back that was taken or would have been taken as a result of your spouse’s debt. The couple must have filed jointly and the return must have been withheld to reduce a debt. Couples have up to 3 years from the date the return was filed or 2 years after the tax was paid to file for relief.

Separation of Liability – This is specifically for couples who are married but no longer live together yet still files a joint tax return. The additional taxes assessed are then divided fairly based on each spous’s income and assets. This makes each spouse only responsible for their share of the tax bill but still allows them to take advantage of married filing jointly status. The catch is this: Separation of liability cannot be used to relieve you from taxes already paid. It can only be applied to future debts to ensure that you do not continue to owe for your spouse’s tax debts while you are no longer living together. Spouses must be separated and living apart for 12 months prior to requesting relief.

Ashley at Coded Tax is an Enrolled Agent with full representation rights before the IRS. She can process spousal relief claims and amendments as needed. Schedule a consultation.