9/24/2017

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Filing Joint Tax Returns

If you are married, filing your tax returns jointly may save you much more than filing them separately.

If you are married at the end of the year, you may file a joint return with your spouse. Filing jointly saves taxes for many married couples, but if you and your spouse both earn taxable income, in some cases overall tax liability is reduced by filing separately.

You may not file a joint return if you were divorced under a decree of divorce or separate maintenance that is final by the end of the year. You may file jointly if you separated during the year under an interlocutory decree or order, so long as a final divorce decree was not entered by the end of the year. If during the period that a divorce decree is interlocutory, you are permitted to remarry in another state, the IRS recognizes the new marriage and allows a joint return to be filed with the new spouse. However, courts have refused to allow a joint return where a new marriage took place in Mexico during the interlocutory period in violation of laws in certain states.

When you and your spouse file jointly, each of you may generally be held individually liable for the entire tax due, plus interest and any penalties. The IRS may try to collect the entire amount due from you even if your spouse earned all of the income reported on the joint return, or even if you have divorced under an agreement that holds your former spouse responsible for the taxes on the joint returns you filed together. However, there are exceptions to this joint liability rule for "innocent" spouses and for divorced or separated persons.

You may be able to obtain innocent spouse relief where tax on your joint return was understated without your knowledge because your spouse omitted income or claimed erroneous deductions or tax credits. In such a case, you may make an innocent spouse election within two years from the time the IRS begins a collection effort from you for taxes due on the return.

Furthermore, if you are divorce, legally separated, living apart or the spouse with whom you filed jointly has died, you may be able to avoid tax on the portion of a joint return deficiency that is allocable to your ex-spouse by making a separate liability election within two years of the time the IRS begins collection efforts against you. You may make the separate liability election even if you apply for innocent spouse relief. In some cases, it may be easier to qualify for relief under the separate liability rules than under the innocent spouse rules because innocent spouse relief may be denied if you had "reason to know" that tax was understated on the joint return, whereas the IRS must show that you had "actual knowledge" of the omitted income or erroneous deductions or credits to deny a separate liability election.

Both you and your spouse must sign the joint return. Under the following rules, if your spouse is unable to sign for him or her. If, because of illness, you spouse is physically unable to sign the joint return, you may, with the oral consent of your spouse, sign his or her name on the return followed by the words "By_____________, Husband (or Wife)." You then sign the return again in your own right and attach a signed and dated statement with the following information: (1) the type of form being filed, (2) the tax year, (3) the reason for the inability of the sick spouse to sign, and (4) that the sick spouse has consented to your signing.

To sign for your spouse in other situations, you need authorization in the form of a power of attorney, which must be attached to the return. IRS Form 2848 may be used.

If your spouse does not file, you may be able to prove you filed a joint return even if you spouse did not sign and you did not sign as you spouse's agent where:

  • You intended it to be a joint return--your spouse's income was included (or the spouse had no income).
  • Your spouse agreed to have you handle tax matters and you filed a joint return.
  • Your answers to the questions on the tax return indicate you intended to file a joint return.
  • Your spouse's failure to sign can be explained.

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