I Just Got Married and My Spouse has Tax Debt – How Should We File?
Question:
I just got married and have a question about whether my spouse and I should file our next tax return married filing jointly or separately since my spouse has some outstanding tax liability?
Answer:
The answer really has a couple of options, and part of it depends on how much of a hassle you want to put up with. I would like to start off by saying, I don’t advise anyone to pay any more in taxes than they are liable to. That being said, you generally come out better when you are able to file your return married filing jointly – especially if you do not itemize your deductions because the standard deduction is much larger. However, if you don’t work (or otherwise would not owe taxes for a particular year) and your spouse does owe taxes (even with a joint return) filing a joint return will make you liable for the tax due on that return only. Signing a new tax return married filing jointly will not make you liable for your spouse’s old tax liabilities.
Here’s where the hassle comes into play. When you owe the IRS, they will retain any refund that is due on your future returns as payment of the taxes. Therefore, if your spouse owes back taxes and you don’t and you file a joint return, the IRS is going to seize the entire return and apply that to the old taxes. They are not supposed to do this. They are supposed to give you your portion of the refund that is due to you based on your financial contribution to the taxes during the year. You will need to file an “Injured Spouse” request either with your tax return or separately later on to get your portion of the tax refund back, and it may take several months.
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