Taxes and Marriage
Authored By: Iowa Legal Aid
When discussing taxes and marriage, there are a few myths to be examined and pitfalls to avoid.
Myth 1: I have to file a joint return with my spouse.
- Married filing jointly is an election. This means you have a choice to file jointly or separately. If both spouses don’t agree, they will have to file separately.
- The Supreme Court recently overturned the section of the Federal Defense of Marriage Act (DOMA) denying federal benefits to same-sex couples whose marriages were recognized by state law. Iowa’s same-sex couples may now file joint returns under both federal and state of Iowa law. Same-sex couples may make the same elections on their returns as heterosexual couples. Iowa has additional filing statuses not covered by this article.
- Filing jointly is often a better deal. Certain credits such as the Earned Income Tax Credit (EIC) are only available to married couples who file jointly. Taxes are often lower for joint filers.
- If one spouse files separately and itemizes, the other spouse will have to itemize. This is only a good thing if both have itemized deductions to take.
- Even with all the benefits of filing jointly, filing separately may be a better idea if your spouse is not a good record keeper, feels that he or she doesn’t need to report payments of cash, or is “creative” with expenses. If you file jointly and the IRS audits your return, both you and your spouse will be held responsible for the debt. (But see, Pitfall 2)
Myth 2: I only have to file as a married person if I am married for the last half the year.
- If you are married as of December 31st, you are considered a married person for that tax year. The opposite is also true. If you are divorced as of December 31st, you are considered a single person for the tax year.
- If a couple is separated the last six months of the year and one spouse is maintaining the household for a qualifying person such as a minor child, then that person may be able to file as head of household instead of married filing separately.
- If the tax benefits or drawbacks are important enough to you, you can try to plan these events accordingly.
Pitfalls to Avoid
Pitfall 1: When you file taxes, if you use your married name on your tax return and the Social Security Administration (SSA) hasn’t changed your name in their records, your return will likely be rejected if filed electronically.
- The IRS checks names and social security numbers against SSA records.
- This is why it is so important to report names and social security numbers just as they appear on the card.
- If you change your name when you get married, you should apply for a social security card in your new name and provide your employer with your new name.
- If you wait until your return is rejected, you can fix your name at the Social Security Administration and your return can be resubmitted electronically or mailed in.
Pitfall 2: You filed a joint return with your spouse and now the IRS says you owe money.
- In special circumstances, you can ask the IRS for an exception to the joint liability rule.
A spouse who requests relief is sometimes called an “innocent spouse.”
Circumstances where relief might be granted:
- The innocent spouse didn’t know or had no reason to know the other spouse was lying about income or expenses, or didn’t know or had no reason to know the spouse didn’t pay the tax bill.
- A widow(er) discovers stacks of hidden mail including IRS notices. The other spouse couldn’t face financial problems so kept it a secret.
- The innocent spouse knew about the problems but did not feel like she could refuse to sign the return because of abuse or mistreatment.
- An “innocent” spouse will have to request relief on form 8857.
- The innocent spouse should be prepared to provide documentation and may need to appeal his or her case.
- The non-requesting spouse will be given an opportunity to respond to the request for relief.
The IRS can be asked to withhold personal location information such as his or her address or telephone number.
See the resource “My Spouse Lied and I got the Bill” on Iowa Legal Aid’s website at iowalegalaid.org. (TIP: Type “My Spouse Lied” in the search box then click “go.”)
Pitfall 3: Filing a return as a married couple when you are just living together.
- If you file jointly and break up later, the IRS may want proof you are divorced before the IRS accepts a return from you as a single person.
- In the alternative, the IRS may try to collect a refund you received using the wrong filing status.
- Iowa law recognizes common law marriage. However, simply living together is not enough to be considered married under common law.
- For more information about Common Law Marriage, see the resource “Common Law Marriage in Iowa” on the Iowa Legal Aid website at iowalegalaid.org.
- Get proper legal advice.
- Don’t listen to tax preparers who encourage you to file as married to help the other person out. You are either married or you aren’t.
- Tax preparers can’t advise you about your marital status unless the preparer also happens to be an attorney familiar with family law.
Where to Go for Help with a Tax Problem
If you have tax problems, you may be able to get help from Iowa Legal Aid’s Low-Income Taxpayer Clinic. Call Iowa Legal Aid at 1-800-532-1275 for details.
This article was not intended or written to be used and cannot be used to avoid penalties under the Internal Revenue Code.
Last review 7/22/13