There are five filing statuses that can be used for filing federal income tax returns. These are: single, married filing separate, married filing joint, surviving spouse,, and head of household. Part 1 will discuss single and married filing separate, including innocent spouse relief. Part two will discuss married filing joint, surviving spouse, and head of household.

SINGLE

A single taxpayer is one who is not legally married on the last day of the tax year. This could be someone who never married or was divorced on the last year of the tax year and does not qualify for head of household. Another reason for filing single, may be where a couple were married and one of the spouses died more than two years ago and the living spouse no longer qualifies for surviving spouse. The standard deduction for 2012 is $6,100 [J. K. Lasser’s Monthly Tax Letter, October 2012]

MARRIED FILING SEPARATE

Married taxpayers who do not want to file a joint return, use this status. This may be where a couple is married but are unable to agree to or do not want to file a joint return. It could also be where the married couple are living apart for the last six months of the year and are not in contact with one another. The amount for the standard deduction for 2021 is $6,100 [J. K. Lasser’s Monthly Tax Letter, October 2012

To file a separate return, each spouse must file their tax return using the same method to determine taxable income. This means that both spouses must use the standard deduction or itemize their deductions (charitable donations, medical expenses, mortgage interest, and taxes) even though one spouse’s itemized deductions may be less than the standard deduction.

A second reason for filing separate is where one spouse may have a very high income and the other spouse has Adjusted Gross Income (AGI) much lower than the other spouse and the spouse with the higher income may have certain itemized deductions that are limited as a percent of AGI..

EXAMPLE

Beth and Rob are married. Beth’s income is $30,000 John’s is $250,000. Beth’s medical expenses are $15,500 and Rob’s are $2,500 Only medical expenses that exceed7 /12/%

of Adjusted Gross Income can be deducted. If Beth and Rob file a joint return their Adjusted Gross Income is $280,000 and medical expenses are $20,500. Only medical expenses that are more than $21,000 (7 ½% x $280,000) will be deductible (assuming all itemized deductions exceed the standard deduction). Since their combined medical expenses are $18,000, which is less than $21,000, they would not be able to take a deduction for medical expenses. If Beth files a separate return with Adjusted Gross Income of $30,000 and medical expenses of $15,500 she will be able to deduct $12,750 [$15,500 – (.075 x $30,000)]. Filing a separate return , Beth has deductible medical expenses, whereas on a joint return, their deduction is zero.

A third reason for filing a separate return is where one spouse knows or suspects that the other spouse has not reported a large amount of taxable income or takes a large amount of unallowable deductions. If the IRS discovers this, they will compute the correct taxable income and tax due and then assess penalties and interest that arise from the tax deficiency on a jointly filed return . On a joint return both spouses are jointly and severally liable for these amounts, even if they are divorced.

INNOCENT SPOUSE RELIEF

The following information is taken from the IRS web site:

Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. Both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce. Joint and several liability means that each taxpayer is legally responsible for the entire liability. Thus, both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits. This is also true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns. In some cases, however, a spouse can get relief from joint and several liability. There are three types of relief from joint and several liability for spouses who filed joint returns:

INNOCENT SPOUSE

This status provides the taxpayer relief from additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits. You must meet all of the following conditions to qualify for “innocent spouse relief”:

(1) You filed a joint return, which has an understatement of tax (deficiency), which is solely attributable to your spouse’s erroneous item. An “”erroneous item”” includes income received by your spouse, but which was omitted from the joint return. Deductions, credits, and property bases are also erroneous items if they are incorrectly reported on the joint return

(2) 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, and

(3) Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax

SEPARATION OF LIABILITY

This status provides for the allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated because an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible.

EQUITABLE RELIEF

This status may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid.

NOTE: You must request innocent spouse relief or separation of liability relief no later than 2 years after the date the IRS first attempted to collect the tax from you. For equitable relief, you must request relief during the time the IRS has to collect the tax from you. If you are looking for a refund of tax you paid, then your request must be made within the time period for seeking a refund, which is generally three years after the date the return is filed or two years following the payment of the tax, whichever is later. Not all IRS attempts to collect the tax from you will trigger the two year period for filing a request for innocent spouse relief or separation of liability relief to the IRS. See their web site for more information:

Collection activities that start the two year period are:

(1) The IRS issues a section 6330 Collection Due Process notice to you. A section 6330 Collection Due Process notice is a notice that tells you that the IRS intends to collect the tax from you by levy and that you have a right to a Collection Due Process hearing

(2) The IRS applies your income tax refund from another year against an amount you owed on a joint return for the year for which you seek innocent spouse relief and the IRS informed you about your right to file a Form 8857

(3) The filing of a suit by the United States against you for the collection of the joint tax liability, or the filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim that involves your property

To qualify for “separation of liability relief” you must have filed a joint return and must meet one of the following requirements at the time you request relief:

(a) You are divorced or legally separated from the spouse with whom you filed the joint return

(b) You are widowed

(c) You have not been a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857 (PDF), Request for Innocent Spouse Relief.

(d) If, at the time you signed the joint return, you had actual knowledge of the item that gave rise to the understatement of tax, you may not qualify for separation of liability relief.

(e) You may qualify for “equitable relief” if you do not qualify for innocent spouse relief or separation of liability relief. Equitable relief is available for additional tax owed because income was not reported or because of a reporting error (an understatement) or you properly reported the tax on your return, but you did not pay it (an underpayment). To qualify for equitable relief you must establish that, under all the facts and circumstances, it would be unfair to hold you liable for the understatement or underpayment of tax. In addition, you must meet other requirements listed in Publication 971, Innocent Spouse Relief.

To seek innocent spouse relief, separation of liability relief, or equitable relief, you should submit a completed Form 8857 (PDF), Request for Innocent Spouse Relief, or a written statement containing the same information required on Form 8857, which is signed under penalties of perjury, to the IRS. You may also refer to Publication 971, Innocent Spouse Relief, for more information. If you request relief from joint liability, the IRS is required to notify the spouse with whom you filed the joint return of your request and allow him or her to provide information for consideration regarding your claim. To learn more about innocent spouse relief, you can use the Innocent Spouse Tax Relief Eligibility Explorer at www.irs.gov. Click on “Individuals,” “Tax Information for Innocent Spouses,” and “Explore if you are an Eligible Innocent Spouse.”

If you lived in a community property state and filed as “married filing separate” rather than “married filing jointly”, you might still qualify for relief. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Refer to Publication 971 for more details.

Relief from joint and several liability should not be confused with an injured spouse claim. You are an “injured spouse” if you file a joint return and all or part of your share of the refund was, or will be, applied against the separate past-due Federal tax, state tax, child support, or Federal non-tax debt (such as a student loan) of your spouse with whom you filed the joint return. If you are an injured spouse, you may be entitled to recoup your share of the refund. For more information, obtain Form 8379 Innocent Spouse Allocation.

SAME SEX COUPLES

The IRS ruled same-sex partners who are legally married for state law purposes, who are legally married under state law cannot file 　married filing separate. The IRS also ruled same-sex partners who are legally married for state law purposes whose only dependent is his or her same-sex partner cannot file a federal tax return using head of household. A taxpayer’’s same-sex partner is not one of the related individualsdescribed in the law that qualifies the taxpayer to file as head of household, even if the same-sex partner is the taxpayer dependent.

CIRCULAR 230 DISCLOSURE:

Pursuant to regulations governing practice before the IRS, any tax advice contained herein is not intended or written to be used and cannot be used by the taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

The information in this article is based on the writers knowledge from teaching income tax and practical experience preparing tax returns.

For criteria on determining what the qualifications are for a specific filing status, see the IRS web site.