Navigating the complexities of taxes during a marriage in California requires careful consideration of filing options. Couples in the state can choose to file jointly or separately. Each option carries its own sets of advantages and drawbacks, especially if a spouse chooses a route without the knowledge or consent of the other.
Reasons for filing separately
To be clear, there are several legitimate reasons to file separately. First, you may want some financial protection to shield yourself from liability from your partner’s tax debts or errors. Another reason could be tax credits because some specific tax credits or deductions may not be available to joint filers.
Next, you might need to lower your adjusted gross income for income-based student loan repayment plans or other repayment plans based on your income. Finally, you may have privacy concerns and want to avoid the disclosure of financial information to your spouse.
The drawbacks to filing separately
However, drawbacks accompany the decision to file separately. First, separate filers may face higher tax rates compared to joint filers. Second, separate filers may be ineligible for certain tax benefits, including earned income credit, child and dependent care credit, adoption credit and education credits. Finally, there is the itemization requirement. If one spouse itemizes deductions, the other must do so as well, potentially limiting the overall deductions.
Responding to a spouse filing separately without consent
Discovering that a spouse has filed separately without prior knowledge can result in unexpected consequences. Increased tax payments or obligations may arise due to the failure to report shared income or deductions. Additionally, valuable tax benefits available through joint filing may be forfeited.
To address this situation, you have a few options. First, you can file an amended return to change the filing status from separate to joint, provided both spouses agree. You can also seek innocent spouse relief from the IRS by demonstrating ignorance or lack of reason to know about the spouse’s tax liabilities or errors. Finally, you can request equitable relief from the IRS, arguing that it would be unjust to hold you responsible for the spouse’s tax liabilities or errors.
Filing taxes is a joint decision that significantly impacts both parties in a marriage. If a spouse files separately without consent or knowledge, adverse consequences may arise. However, there are avenues to protect one’s interests.