Originally Posted by justspeed
#1;My wife and I have been married for 7 years. We have her two children and our Daughter. My wife lost her Job in Dec of 2012 because she got her 4th DUI. When I lost her income we lost the family vehicle to the bank and things have only gone downhill. She owes Thousands in fines and court costs. Spent most of 2013 in jail and is still not in the home because she is in court ordered treatment. Here is my biggest question. She cashed out all of her company stock and 401K. She took all that money and used it to pay fines, probation and etc. I'm doing our taxes and we owe 11K and I cant afford to pay that. Our home is in my name. I bought our home before we married. Should I file taxes separate?
#2;She owns nothing so nothing the IRS could put a lien on. If I file jointly the tax bill drops a bit thanks to more credit but I'm afraid there would be a lien put against what I Own. Am I correct? I'm not sure what the best thing to do is.
In general, married couples will have a lower overall tax bill if they file a joint return. Also, couples filing separately will lose out on a number of important tax breaks. Nonetheless, filing separate returns makes the most sense when one spouse OWES a significant amount of money, but the other spouse could get a refund. It also makes sense when one spouse is cheating on their taxes, and the other spouse doesn't want to be involved.Filing separate returns requires a great deal of cooperation and sharing. Both spouses must itemize or take the standard deduction. you cannot split their tax strategies by one person itemizing and the other taking the standard deduction.Also, there may be significant state tax issues if yiu live in a community property state. If both of you lives in a community pty state, then you will split your income using community property rules. youwill also split your deductions for community property as well.filing separately will preserve the separate responsibilities for payment of tax and audit risk..
#2; you may request innocent spouse relief; you can be relieved of responsibility for paying tax, interest, and penalties if your spouse improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse . However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse.The IRS will figure the tax you are responsible for after you file Form 8857. You are not required to figure this amount. But if you wish, you can figure it yourself. You must meet all of the following conditions to qualify for innocent spouse relief; You filed a joint return which has an understatement of tax due to erroneous items of your spouse . You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax . Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax. A request for innocent spouse relief will not be granted if the IRS proves that you and your spouse transferred property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, ex-spouse, or business partner.
Note; By filing a joint tax return, both of yu report all your income, deductions, and credits on one tax return. Both spouses must sign the return, and both spouses accept full responsibility for the accuracy and completeness of the information reported on the tax return. If the tax is unpaid, each spouse is held personally responsible for the payment. If the tax return is audited by the IRS, each spouse will be held responsible for providing documents to demonstrate the accuracy of the tax return. In other words, each spouse is held jointly and severally liable for the taxes filed on a jointly filed tax return.
The IRS cautions, "Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. This means that if one spouse does not pay the tax due, the other may have to. Or, if one spouse does not report the correct tax, both spouses may be responsible for any additional taxes assessed by the IRS. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.The IRS may grant relief from joint liability for taxes through innocent spouse relief, separation of liability, or equitable relief..