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By Robert W. Wood
Wood LLP, San Francisco, CA
Whether you are new to marriage or have decades under your belt,
it pays to think about your tax filing status. With same sex
marriages, much of the discussion these days is about joint return
filing and when the IRS will issue guidance making the rules clear.
See Gay Married Couples Lacking IRS Guidance Risk Paying
More. There should be parity, and in some cases there
will be a significant dollar impact from joint returns.
But the knee-jerk "file jointly" reaction many couples have is
worth reconsidering. Many people don't consider which box to check
at the top of their return. If we're married, we file jointly; if
not, we file single. That can be shortsighted.
Five Choices. There are five choices:
Single, Married Filing Jointly, Married Filing Separately, Head of
Household and Qualifying Widow(er) with Dependent Child. The
Head of Household status may be the one most often claimed in
error. In Tax Tip 2013-13, the IRS lists pointers about filing
1. Last day of the year. This one is easy.
Your marital status on the last day of the year determines your
marital status for the entire year. So to be
eligible to file a married filing joint return, you
must be married on December 31st.
2. Legal Separation. If you are legally
separated under state law you can file single. Of course, if you
are legally divorced you can also file single. But if you are still
married on December 31st and not legally separated, you'll
need to file married (presumably filing separate), not single.
3. Doubling Up. If more than one filing
status applies, you can pick the one giving you the lowest tax. You
and your spouse may pay lower taxes by filing married filing
jointly. But sometimes even if you would pay less that way, it is
worth considering filing separately.
4. Innocent Spouse? By filing jointly,
each of you is 100% liable regardless of who had the income. What
if you learn that your spouse had unreported income? You are also
on the hook. See IRS Tougher On "Innocent" Spouse Relief and
When An Innocent Spouse Seeks Tax Relief. If you're
worried about your spouse's tax debts, get some advice. See
Innocent Spouse Tax Relief Eligibility Explorer.
If you file jointly and later face joint liabilities, you may be
able to claim innocent spouse relief. See More Timing
Disputes Over Innocent Spouse Relief. Recently, the IRS
announced more liberal rules. See IRS Proposes To Permanently
Ease Restrictions For Innocent Spouse Relief . Yet you can
avoid these issues entirely by filing married filing
separate. See Married Filing Jointly, or Separate? How to
5. Death of Spouse. If your spouse died
and you did not remarry during that year, you usually can still
file a joint return for that year.
6. Head of Household? This status
generally applies to taxpayers who are unmarried. You must also
have paid more than half the cost of maintaining a home for
yourself and a qualifying person.
7. Qualifying Widow(er) with Dependent
Child. You may be able to choose this as your filing
status if your spouse died, you have a dependent child, and you
meet certain other conditions.
Get More: Most people don't devote any
thought to their filing status. That can be a mistake. Many
same sex couples understandably want the benefits of joint
filing. But same sex or not, run the numbers and consider if
joint or separate returns are better for you.
Don't merely consider the marginal tax dollars. Even if
you'll pay less in taxes by filing jointly, weigh the pros and
cons. It can be worthwhile to keep returns separate, especially if
one spouse has past credit, tax or legal problems or any of these
problems seem likely in the future. Separate filings help keep
assets from being co-mingled too, which can make divorce less
To learn more, check out IRS Publication 501, Exemptions,
Standard Deduction, and Filing Information. You can also use
the Interactive Tax Assistant (ITA) on the IRS website to determine
your filing status . The ITA tool takes you through a series of
questions and provides you with responses. The IRS needs to
address same sex marriage. Even so, every married couple should
think through what is best for them and should avoid the automatic
joint filing reaction.
For more information in the Tax Management Portfolios, see
Maule, 503 T.M., Deductions: Overview and Conceptual Aspects,
and Maule, 506 T.M., Tax Credits: Concepts and
Calculation, and in Tax Practice Series, see ¶3310, Computation
of Tax - Individuals.
© 2013 Robert W. Wood
Originally published by
1 Robert W. Wood is a tax lawyer with a nationwide
practice (www.WoodLLP.com). The author of more than 30 books
including Taxation of Damage Awards & Settlement
Payments (4th Ed. 2009 with 2012 Supplement,
www.TaxInstitute.com), he can be reached at Wood@WoodLLP.com.
This discussion is not intended as legal advice, and cannot be
relied upon for any purpose without the services of a qualified
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