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In a community-property state, is there any advantage to a married couple filing separately?
I live in Texas (a community property state) and am married. It's time for my husband and I to file our taxes, but I'm wondering if we should file separately or jointly. I worked a standard job last year and paid in taxes. He worked contract jobs, did not pay taxes, and will owe a substantial amount of money-- I'd guess between $2000 and $3000 dollars. My husband and I are newly married and have always kept our money separate-- what he earns is his, what I earn is mine, and we split the bills. I know this strikes some people as strange, but it works for us. Would filing separately reduce my liability for his debt to the goverment? i.e., would filing separately protect me from having my wages garnished in the event that my husband becomes delinquent in his payments to the feds? If not, is there ANY benefit whatsoever to filing separately in a community property state? If you file separately here, you still have to put your spouse's income information on your filing form.
2 Answers
- Bostonian In MOLv 71 decade agoFavorite Answer
If you file separately from a Community Property state you have to each show half of the community income on your separate returns. While that might lower his tax bill it will probably increase yours quite a bit.
He will still have to pay the SE taxes on the entire SE income from his business. This will MASSIVELY complicate the filing of separate returns in your case.
You can figure it both ways and file whichever way is best over all, but the complexities of working up separate returns in this case may not be worth trying if you have to pay someone to do it for you.
- 1 decade ago
It sounds to me like you should file separate if you still want to keep your finances separate. Yes, you do have to put your spouses info, but not their tax info. Maybe, since your husband is a contractor, you should look into him filing every quarter rather than every year so the balance due is smaller. Granted, you are going to be paying the same amount that you would at the end of the year, but it is going to be in smaller chunks throughout the year. My brother-in-law's, step-dad, and dad all do this (and file separate) to avoid paying so much at one time. Good luck!
Source(s): I have filed my taxes, other people's taxes for several years now.
