married couples

Married Couples Must File Jointly – False!

There is no law in place that prohibits married couples from filing their federal income tax returns separately.

Filing jointly is by far the more popular option. Just last year, over 95% of couples chose to file jointly. While it’s unpopular to file separately, there are special instances where it would be more beneficial than filing jointly.

Why is Filing Jointly So Popular?

An overwhelming majority of married couples choose to file jointly because the IRS gives joint filers the ability to deduct a significant amount of their income. Also, the IRS offers joint filers a greater availability of tax breaks and tax credits, such as:

  • American Opportunity and Lifetime Learning education credits, earned income tax credit, and child and dependent care tax credit.

Additionally, for couples where one spouse earns most or all of the income, filing jointly allows them to shift the high earner’s income into a lower tax bracket.

When is it Beneficial to File Separately?

Now, it may seem pointless to file separately after considering all the advantages afforded to joint filers. However, there are particular situations where it might be better to file separately.

Spouses Earning the Same Income

Sometimes, a married couple may end up paying the IRS less by filing separately when both spouses earn the same income since their tax rates should be about the same. The only way to be sure is to prepare your tax returns both ways then compare the net refunds.

Medical Deductions

Imagine a couple where one earns significantly more than the other, and the one who makes less needs to have surgery.

If the couple was filing jointly, none of the lower earner’s medical expenses could be deducted because the couple’s combined income exceeds the threshold for medical deductions.

However, if the couple had filed separately, the medical costs would exceed the lower earner’s income and allow them to claim more medical deductions.

Divorce or Separation

In cases where a couple is either living separately or will soon be divorced, then it is reasonable to file separately to avoid unwanted interaction.

Protection from Spouse Fraudulency

For someone wanting to protect themselves from the liability of tax fraud or evasion due to their spouse’s tax misfiling or misconduct, filing separately would be a wise decision.

If you have tax liability as a result of your spouse’s tax negligence or need tax debt relief, you can take the following steps.

  1. Click here to take our brief survey to pre-qualify for tax debt relief.
  2. Speak with one of our expert Resolution Officers.
  3. Start your resolution process!

Any new or systemic Liens and/or Levies will also be suspended for the time being.

For taxpayers who are considered “seriously delinquent”, the IRS will suspend any new certifications for the remaining period. Any taxpayer who falls into this category in reminded and encouraged to enter into an Installment Agreement or apply for an Offer In Compromise.

The IRS will not forward any new delinquent accounts to private collection agencies at this time.

Taxpayers have until July 15, 2020 to verify to the IRS they are qualify for the Earned Income Tax Credit or to confirm their income. If the taxpayer is unable to verify their credentials or provide appropriate documents for this credit, they are encouraged to notify the IRS before the deadline. No cases will be denied this credit for failure to provide requested information until July 15.

Case workers will continue business as usual. However, most case work will be conducted remotely (video/over the phone conferences). Any requests for documentation sent by the Office of Appeals should be responded to in a timely manner to ensure a smooth process.

The IRS will continue to take the appropriate measures to stay compliant and protect the applicable statutes of limitations. In situations where certain statutes may be compromised, taxpayers are encouraged to extend such statutes. Otherwise, Notices of Deficiency will be issued by the IRS and similar actions will be pursued to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.

Practitioners are reminded that PPS wait times may be significantly longer, depending on staffing levels and allocations going forward. The IRS will continue to monitor this as situations develop.

“The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others,” Rettig said. “We are committed to helping people get through this period, and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others.”

Learn how easy it is to qualify for tax savings.

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