Can a Spouse Be Responsible for Back Taxes?
- The easiest way to ensure your tax refund will not be used to pay a spouse's tax debt is to file separate tax returns. Filing separate tax returns could mean you lose the tax savings that customarily come with filing a joint return. Consider carefully what the separation of refund from debt is worth to you and consult with a tax professional about your specific situation before deciding to go this route.
- You still have the option of filing married filing jointly and protecting your portion of the tax refund from going toward paying off your spouse's back taxes. When you complete your taxes, include a Form 8379, Injured Spouse Allocation. The spouse without the tax debt is considered the injured spouse. The form requires you to divide up all income, deductions and exemptions between both spouses. The more income, deductions and exemptions you can justifiably attribute to the injured spouse, the more of the tax refund that will be protected from application toward paying off the other spouse's tax debt.
- Back tax debt may occur during the marriage as well. If you habitually file your federal taxes jointly, you may still be protected against paying the tax debt incurred during the marriage if you were unaware that your spouse underreported or underpaid tax liability during the course of the marriage. File Form 8857, Request for Innocent Spouse Relief, and be prepared to justify why you do not feel the tax debt should be your responsibility.
- Many marriage conflicts revolve around finances. Protect your marriage by discussing your financial and legal obligations prior to saying "I do." Not only do you protect your marriage from unnecessary grief, admitting to outstanding tax debt allows you and your spouse to come up with a plan to pay off the debt and to knowledgeably plan for your annual tax obligation in ample time to prepare for the year-end filing.