When we dream about finding our soul mate and having the perfect wedding and living happily ever after, taxation is probably the furthest thing from our minds. I get it, it’s not exactly the most romantic conversation. “Are you IRS compliant” is decidedly not in the “sweet talk” lexicon, but it might be worth tossing it in there with your “I love yous” because having these conversations can help to avoid unpleasant surprises (and unpleasant language) come tax time.
You’ve said your “I dos” and sworn devotion to your spouse for your whole life. Little did you know that according to the IRS that means the whole year! That’s right, whether you say those vows on New Year’s Day or New Year’s Eve, you are joined in taxation with the love of your life for the full year. From that year on you have two choices: Married Filing Jointly (the cool kids call it MFJ) or Married Filing Separately (the cool kids call that one MFS). For most couples this is a pretty simple decision; MFJ has more favorable tax rates, higher income phaseouts for credits and deductions, and has the added advantage of only filing one tax return between the two of you. MFS is basically the exact opposite: higher tax rates, lower phaseouts (or complete elimination) for credits and deductions, and you have to file two tax returns (and don’t even get me started on community property states). Despite all this, there are some situations where it makes sense for couples to file separately. Every tax situation is as distinctive as your relationship. Consider all the unique aspects of your tax situation when making the choice to file jointly or separately. For an in-depth look at these filing status, check this out.
Do you owe the IRS? Does your spouse? How about unpaid child support or student loans? Having your tax refund unexpectedly vanish due to these circumstances could certainly lead to some marital discord. The government can grab your refund to cover these debts (and others), so it’s important to know the answers to these questions. You may want to have your refunds go toward paying off that debt, but if not you (or your spouse) don’t necessarily need to say goodbye to your whole refund. Filing a separate return is one way to get some of that refund back, though it comes with the pitfalls mentioned earlier. If you want to hold onto some of that refund without the higher tax rates and extra filing fees you can file for Injured Spouse relief by using this form (form 8379).
Admit it: one of the big perks of being a couple is that you don’t have to do everything yourself anymore! When it comes to things like cooking, bill paying, and caring for our pets/children we share the duties, usually agreeing (spoken or not) which aspects of our lives each partner will be in charge of. Taxes are no different. Often one partner runs point on getting all the paperwork together and working on the tax return, either with software or with a preparer (or both!) and then hands the return to their spouse to sign. Of course, we never sign anything we haven’t read, right? Right? When you put your name on that return you are stating “under penalty of perjury” that everything in it is true and accurate so think twice before simply signing that dotted line.
Have questions about your return? Ask! Taxes are complicated and, let’s face it, you have better things to do than read tax publications. Luckily there are people who read all that stuff so that you don’t have to! Help is just a click away.
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