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Old 05-04-2015, 10:31 AM
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Injured Spouse 8397 questions ...

Ok a little back story. Ten years ago I met my wife and 8 years ago we were married. Shortly before our wedding she quit her job and started watching her nephew for her brother so she could be a homemaker and stay at home mom when we start having kids. We now have three.

Anyways, even though my wife has never had an income since we were married I still always filed joint for any tax benefits. This worked great for our first five years of marriage until 2012 tax season. I was following my return, as I always have, on Where's My Refund and it showed it was to be deposited within the week. When it wasn't deposits I checked the site again and it showed my total was $0 because of an offset and gave me a number to call. I called and entered my info and it said I had no debt. Confused I entered my wife's info and it came back my refund had been taken for a past student loan. I was devastated! I guess my wife had gone to school for one year back in the mid 90's and had a student load out which she paid on until she quit her job.

I did some research and read about injured spouse and filled out the paper work and after a couple months did receive my full refund. Then for the next two years I filed the 8397 along with my tax return forms and after a couple months have received my full refund.

Fast forward to this year and my wife wanted to do something and started selling ThirtyOne bags. She has been making some sales so she is going to have to file this year. I have a few questions:

1, Is there a minimum she has to make to file or does she have to file even if she only made $1?

2. Is we file joint and they take some of the return because she has an income now does that say half the refund is mine and half hers and I file the 8397 and only get half of the total return?

3. If we file seperate can they touch my refund at all?

4. If we file separate how does that effect child tax credits. We have three children, do I just claim them and get my full amount since I don't owe the government a loan and they take hers?

I want her to pay her loan but supporting a family of five on one income is really hard and I just can't pay off her past debt and she will make less than a $1000 with this ThirtyOne thing so she will have to let them take her tax refunds (if she is even supposed to get one).

How can I do this so I still get the refund I have been getting every year?



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Old 05-07-2015, 04:11 PM
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1, Is there a minimum she has to make to file or does she have to file even if she only made $1?===>>>No; you can file a joint tax return with your spouse even if only one of you had income. There is nothing in the tax rules requiring that a husband and wife both have income in order to file jointly.

2. Is we file joint and they take some of the return because she has an income now does that say half the refund is mine and half hers and I file the 8397 and only get half of the total return?=====>> The IRS will determine what percentage of the refund should be designated for each party and send the amount due to the injured spouse, applying the remainder against the other spouse’s debt. An Injured Spouse Claim can help you get back your part of a tax refund from a joint tax return .To qualify, you are not required to pay the past due amount- This means that the debt is one which your spouse incurred before you got married or one for which your spouse is solely liable; You reported income on the joint tax returns; You made and reported payments in the joint return. After filing your MFJ return, you need to complete the Form 8397 and mail it to the IRS center at which you filed the tax return .
3. If we file seperate can they touch my refund at all?=========>>No; filing your tax return as MFS, you and your spouse each report your own individual income, deductions, credits, and exemptions on different tax returns. If you file separate returns, you and your spouse are only responsible for your own individual tax liability. You will not be responsible for any tax, penalties, and interest that results from your spouse's tax return. Although it is normally advantageous to file a joint return, there are occasions when separate returns are preferred.

4. If we file separate how does that effect child tax credits. We have three children, do I just claim them and get my full amount since I don't owe the government a loan and they take hers?=====>> When you file separately from your spouse, your eligibility to claim certain deductions and tax credits is affected.you would receive the full credit if you qualify a few tests;
For some taxpayers, utilizing the child tax credit can reduce their federal income tax liability to zero. In that situation, any excess or remaining child tax credits may be refundable to the taxpayer for example, if your tax liability is $988, but you are entitled to get $1k from the Child Tax Credit, it will be reduced to $988 and you will owe no taxes. However, you may be eligible to enjoy the Additional Child Tax Credit, which will result in a refund.


I want her to pay her loan but supporting a family of five on one income is really hard and I just can't pay off her past debt and she will make less than a $1000 with this ThirtyOne thing so she will have to let them take her tax refunds (if she is even supposed to get one). How can I do this so I still get the refund I have been getting every year?=====>you need to file your return as MFJ or MFS;as said, if you filed a joint return and you're not responsible for the debt, but you are entitled to a portion of the refund; file the form 8379 for each year you meet the condition .

The MFS filing status provides fewer tax benefits thanMFJ returns, so you will need to weigh the pros and cons and decide for yourself which is the best filing status. Tax law bars you from claiming certain tax credits if you file a separate married returnHowever, there is one clear benefit of filing MFS. By filing a separate return, you are solely responsible for the accuracy and payment of tax related to your separate return. By contrast, on a jointly filed return, both of you are personally responsible for the accuracy of the return and the payment of tax. A spouse who is unwilling to assume legal and financial responsibility for the other spouse's tax obligations should strongly consider filing separately. MFS taxpayers also have lower income phase-out ranges for the IRA deduction.Additionally, MFS taxpayers must both claim the standard deduction or must both itemize their deductions. In other words, one MFS taxpayer cannot claim the standard deduction if the other spouse is itemizing. If you're an injured spouse in one of community pty states, you might still get a refund, but the refund calculation will more than likely be a 50/50 split



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Old 01-23-2016, 10:39 AM
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Thanks Wnhough for the reply, you had lots of helpful information in there. I have a few quick pointed questions since I am about ready to file this year. Thanks in advance for any help!

1. If I file MFS and she has zero income, will the tax child tax credits be split between us or will I get them all. Filing jointly my return will be around $9000 if I file the injured spouse. If I file MFS but 100% of the income is mine will I still get the $9000 or will it split it $4500/$4500 and I lose the part that goes to her?

2. Can I file single and get all the child tax credits?

What is the best way to file and get all of my refund without having to wait four months when I file the injured spouse form?



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Old 01-23-2016, 09:15 PM
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Quote:
Originally Posted by NosajTrah View Post
Thanks Wnhough for the reply, you had lots of helpful information in there. I have a few quick pointed questions since I am about ready to file this year. Thanks in advance for any help!

1. If I file MFS and she has zero income, will the tax child tax credits be split between us or will I get them all. Filing jointly my return will be around $9000 if I file the injured spouse. If I file MFS but 100% of the income is mine will I still get the $9000 or will it split it $4500/$4500 and I lose the part that goes to her?

2. Can I file single and get all the child tax credits?

What is the best way to file and get all of my refund without having to wait four months when I file the injured spouse form?

1. If I file MFS and she has zero income, will the tax child tax credits be split between us or will I get them all.====>no;as she has zero income,she can not support her dependent more than half of the support, then she can not claim a portion of the credit; she in general does not even file her return.


Filing jointly my return will be around $9000 if I file the injured spouse. If I file MFS but 100% of the income is mine will I still get the $9000=>> correct; as only you are subject to the refund not your spouse that has no income.
or will it split it $4500/$4500 and I lose the part that goes to her?======>>assaid no;as you file separate returns, you and your spouse are only responsible for your own individual tax liability.; In general, your share of a refund consists of the payments you made plus a pro-rated portion of any refundable credits if this is subject to. as you had federal income tax withheld from your paycheck or if you made estimated tax payments on your self-employment income, the portion of the joint refund represented by those payments will be included in your share( in this case 100%). Any additional child tax credits will also be included in your share. Any earned income tax credit will be apportioned between you and your spouse based on each person's contribution to the joint adjusted gross income( in this case 100% for you).

2. Can I file single and get all the child tax credits?
=>>correct as said above; your spouse can not claim a dependent due to no income to support a dependent.
but for form 8379, you need to split the income/tax credits on the form;AS you SHOULD FILE Form 8379 by itself, it must show both spouses' Social Security numbers in the same order as they appeared on your income tax return. You, the "injured" spouse, NEED TO sign the form

What is the best way to file and get all of my refund without having to wait four months when I file the injured spouse form?==>> no one likes having to wait for their refund, but the processing does take time. Depending on the complexity of the tax return, various tax credits and overpayments must be allocated between YOU TWO spouses and if you happen to be in a community property state , the IRS must follow state community property law in making many of those determinations;



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