Individuals are considered married if they were legally married and not legally separated under a decree of divorce or separate maintenance as of the last day of the tax year. This provision includes common-law marriages if such marriages are recognized by the state where the marriage began or by the state where the couple resides.
A married couple may choose to file a joint return or separate returns. A joint return often results in a lower federal tax. If separate returns are filed, the effective tax rates are generally higher and several deductions and credits are reduced, limited, or not allowed at all. Whether the couple files jointly or separately, each spouse must report the social security number of the other spouse in the heading of Form 1040A or Form 1040. On a joint return, the spouse’s name is entered in the heading; on a separate return, the spouse’s name is entered next to line 3.
The total income, exemptions, and deductions of both spouses must be included on a joint return, and they must use the same accounting period. Usually, the spouses can be held liable, together or individually, for the entire tax plus any penalties on a joint return.
As you have already read from my previous blog entry, a married person who dies during the year is considered married for that tax year. The surviving spouse is also considered married for that tax year. If the surviving spouse does not remarry before the end of the year, a joint return or separate returns may be filed. A surviving spouse who does remarry may file a joint return with the new spouse or they may file separate returns. The filing status of the deceased taxpayer in such a case must be married filing separately.
Example: Jack and Jill were married. Jack died on January 27, 2008. On December 1, 2008, Jill married Peter. Jill and Peter may file a joint return, or they may file separately, whichever they choose. Jack’s filing status is married filing separately.
The decision whether to file a joint return or separate returns should also take state tax laws into consideration. In many states, the filing status on the state return must follow that on the federal return. If state tax laws are less restrictive for the married filing separately status in your state, the larger federal tax liability may be more than offset by a smaller state tax liability.
A taxpayer who files a joint return and later learns that the other spouse has understated the income (or overstated a deduction or credit) on the return may qualify to request innocent spouse relief from the IRS. For more information, see IRS Publication 971 or the instructions for Form 8857.
Be safe and sane, people! Makes for better business and quality of life.
Oct 16 2009
Kim Isaac Greenblatt
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