Imagine the excitement of planning your wedding, looking forward to a lifetime of love and partnership, but there’s a shadow looming over the festivities – your fiance’s unpaid taxes. “Can I get married if my fiance owes taxes?” you might wonder. The answer is yes, but it requires careful planning and awareness of the potential consequences. With skilled legal guidance from Damiens Law Firm PLLC, our attorneys will guide you through the process of navigating tax liabilities when marrying someone with tax debt.
Your Fiance’s Tax Debt Before Marriage
The first step in addressing your fiance’s tax debt is to gain a clear understanding of their financial situation, including the extent of taxes owed. This involves assessing the extent of their tax obligations and the potential consequences of marrying someone with tax debt. Remember, the Internal Revenue Service (IRS) does not automatically hold you liable for your spouse’s tax debt, but there are certain factors to consider, such as the time the debt was incurred and your tax filing status.
Living in a common-law state may also impact your responsibility for your spouse’s tax debt. Knowing the details of their tax situation and the possible financial repercussions will help you make an informed decision about how to proceed and protect yourself.
Assessing the Tax Situation
Understanding the potential risks to your financial future requires evaluating your fiance’s tax debt before saying ‘I do’. Look for indicators of serious tax debt in your partner, such as:
- Balance due notices from the IRS
- Risk of losing their passport due to significant tax debt
- Being contacted by debt relief scams promising to reduce their tax debt
To effectively assess your fiance’s tax situation, you should:
- Review their withholding status and make any required adjustments.
- Determine if they are eligible to be claimed as a dependent on your tax return.
- Familiarize yourself with the IRS regulations for claiming dependents.
- Examine the residency requirements for claiming a qualifying relative as a dependent.
- Decide whether filing taxes jointly is necessary to qualify for savings.
By following these steps, you can ensure that you are accurately assessing your fiance’s tax situation.
Potential Consequences of Marrying Someone with Tax Debt
Marrying someone with tax debt can have various consequences depending on the circumstances. Awareness of the potential impact on your tax liability, joint assets, and credit score is important even though the IRS offers relief options like innocent spouse relief and injured spouse relief. For example, your tax liability may be affected when you marry someone with tax debt, especially if you file jointly. In states that recognize community property, you may be responsible for your partner’s tax debt even if you file separately.
To safeguard yourself from your spouse’s tax liabilities, you can explore options such as setting up a payment plan or submitting an offer in compromise. Additionally, it’s wise to keep assets separate and consider a prenuptial agreement to protect your financial well-being.
How Marriage Affects Tax Liability
Once you’re married, your tax liability will be influenced by the filing status you choose: married filing jointly or married filing separately. The decision on which filing status to use depends on your personal circumstances and the potential benefits or drawbacks of each option.
Married Filing Jointly
Married filing jointly offers several tax benefits, such as qualifying for multiple tax credits and lower tax rates. However, it also comes with joint and several liability, which means that both spouses are individually and collectively liable for any taxes, interest, and penalties due on a joint return. This means that if your spouse intentionally lied on a joint tax return, you could be held responsible for the resulting spouse’s tax liability, including tax debt, penalties, and interest.
Choosing to file jointly implies shared responsibility for any taxes due, penalties, and other debt incurred, which you need to be aware of. You can mitigate the risks by staying informed about your spouse’s tax situation and communicating openly about financial matters.
Married Filing Separately
Married filing separately can protect you from your spouse’s tax debts, as you’ll only be liable for your own tax bill. However, this filing status can also result in higher taxes and fewer deductions. Some tax credits and deductions may be reduced or eliminated when filing separately, which could offset the protection offered by this filing status.
Weigh the benefits and drawbacks of choosing married filing separately, taking into account your financial situation and the potential tax implications of each option. Consulting a tax attorney can help you make the best decision for your specific circumstances.
Protecting Yourself from Your Spouse’s Tax Debts
To protect yourself from your spouse’s tax debts, consider using prenuptial agreements and keeping assets separate. These strategies can help shield you from potential tax liabilities and ensure your financial future remains secure.
A prenuptial agreement, a legally binding contract between two individuals planning to marry, outlines each partner’s financial obligations and safeguards assets from a spouse’s fiscal liabilities. Prenuptial agreements can help protect your assets from your spouse’s tax debts by maintaining assets separately and stipulating that each spouse is individually accountable for their own tax debts.
Consulting an experienced attorney and verifying the laws of your state are necessary steps to ensure that your prenuptial agreement is valid for tax debt protection. This will guarantee that the agreement contains terms for protecting against tax debts, providing peace of mind as you enter into marriage.
Keeping Assets Separate
Maintaining the separation of assets in a marriage means that each spouse retains ownership and control of their individual assets, such as:
- Real estate
- Other property acquired before the marriage
These assets are not combined with community assets and are generally considered separate property in the event of a divorce.
By keeping assets separate, you can ensure that your individual assets are not considered joint property and are not subject to seizure by the IRS to satisfy your spouse’s tax debts. This can help safeguard your financial well-being and prevent your assets from being used to pay off your spouse’s tax debts.
Tax Relief Options for Married Couples
Married couples facing unpaid taxes and tax debt issues can explore relief options such as innocent spouse relief and injured spouse relief. These options can provide protection and assistance in resolving tax liabilities related to your spouse’s tax debt.
Innocent Spouse Relief
Innocent spouse relief is a tax relief option provided by the IRS for those who unknowingly file tax returns with incorrect information due to their spouse’s actions. This relief protects you from tax liability when your spouse intentionally lied on a joint tax return. To qualify for innocent spouse relief, you must demonstrate that you were unaware of, and had no reason to be aware of, your spouse’s submission of incorrect tax information.
Form 8857, Request for Innocent Spouse Relief, should be submitted within two years of receiving the notification of the tax debt from IRS. This is required to request innocent spouse relief. A tax attorney can help you understand the requirements and guide you through the process.
Injured Spouse Relief
Injured spouse relief is a tax relief option provided by the IRS to individuals who have had their tax refunds applied to their spouse’s tax debts, such as back taxes or child support. Your joint tax refund may be seized by the IRS to cover a debt solely attributed to your spouse. You can request for your portion of the refund back through injured spouse relief, which is a form of equitable relief.
To be eligible for injured spouse relief, you must meet specific criteria, such as filing a joint tax return and not being legally obligated to pay the past-due debt your spouse incurred, especially if your spouse owes back taxes. A tax attorney can help you determine if you qualify for injured spouse relief and guide you through the process.
Communicating with the IRS
Addressing your spouse’s tax debt and negotiating payment plans or settlements necessitate communication with the IRS. The IRS offers various channels for communication, including:
Requesting Information from the IRS
Filing Form 8857, Request for Innocent Spouse Relief, allows you to request information about your spouse’s tax debt. This form allows you to request relief from tax liability when your spouse or former spouse should be held responsible for all or part of the tax debt. Submit the form within two years of receiving an IRS notification of an audit or taxes due due to an error on your return.
Keep in mind that the IRS is subject to disclosure laws and regulations, so it’s essential to be aware of these restrictions when requesting tax debt information. A tax attorney can help you navigate these legal implications and ensure that you obtain the necessary information about your spouse’s tax debt incurred.
Negotiating with the IRS
While negotiating with the IRS can be challenging, enlisting the help of a tax attorney or professional can facilitate the process and help you achieve a favorable resolution. Options such as an offer in compromise, installment agreements, or consulting a certified tax resolution specialist or attorney specializing in tax debt relief may be employed to negotiate payment plans or settlements for your spouse who owes back taxes with the IRS.
When negotiating with the IRS, it’s essential to provide accurate and up-to-date financial information, including income statements, bank statements, and asset information. A tax attorney from Damiens Law Firm, PLLC can represent you in communication with the IRS, submitting offers in compromise or installment agreements on your behalf, and monitoring wage garnishments to ensure they are not excessive. Additionally, our attorney can help you navigate the complexities of a federal tax lien if you’re facing one.
Seeking Professional Help
Dealing with your spouse’s tax debt can be complicated and stressful, but seeking professional help can make the process more manageable. Tax attorneys and qualified tax professionals can provide guidance on tax resolution options, IRS communication, and legal representation to protect your financial future.
When to Consult a Tax Attorney
Consulting a tax attorney becomes important if your financial situation is being affected by your spouse’s tax debt or if you’re encountering legal issues like estate planning or innocent spouse relief. A tax attorney can provide counsel on the potential repercussions of your spouse’s tax debt, devise a plan, bargain with the IRS, and investigate alternatives such as innocent spouse relief.
In addition to helping you navigate your spouse’s tax debt, tax attorneys can offer other services such as:
- Estate planning
- Historical bookkeeping
- Assistance with payroll tax issues
- Assistance with self-employment taxes
Consult a tax attorney to ensure you’re making the best decisions for your financial future.
Finding a Qualified Tax Professional
To secure the best resolutions and understand your rights and responsibilities, it is important to find a qualified tax professional who can help you navigate your spouse’s tax debt. Look for professionals with credentials such as Certified Public Accountant (CPA), Enrolled Agent (EA), or Attorney.
To find a qualified tax professional, consult the IRS Directory of Federal Tax Return Preparers with Credentials or consider professional organizations such as the National Association of Enrolled Agents or the American Institute of Certified Public Accountants. Remember to ensure that the chosen tax professional is adequately qualified and experienced to manage your tax matters.
How Damiens Law Firm, PLLC Can Help You
At Damiens Law Firm, PLLC, we understand the challenges of dealing with your spouse’s tax debt. Our experienced attorneys can help you with tax resolution options, IRS communication, and legal representation to secure your financial future.
Call us today at 601-488-2079 for a free consultation to discuss your unique situation and explore the best solutions for your tax debt concerns.
Frequently Asked Questions
What happens if I marry someone who owes taxes?
If your spouse had tax debt before you got married, only they are responsible for that debt and you are not liable. However, if you file a joint return and receive a refund, it may be intercepted to pay off part of the debt. Your spouse cannot receive any money back from the IRS until their debt is paid.
When you marry someone with debt does it become mine?
Generally speaking, any debt your spouse brought into the marriage does not become yours upon tying the knot. However, depending on the state you are married in, you may be obligated to help pay back any debt accumulated during the marriage.
Am I responsible for my spouse’s tax debt if we file jointly?
If you file jointly with your spouse, both of you are responsible for each other’s taxes, penalties, debt, and levies. This means any tax refund you receive may be used to pay off part of the debt even if it was not incurred by you. However, if you file separately, you will only be responsible for your own individual income and tax liability.
What are the main differences between innocent spouse relief and injured spouse relief?
Innocent spouse relief protects you from liability if your spouse misled the IRS on a joint tax return, while injured spouse relief enables you to claim your share of a joint tax refund if your spouse owes back taxes.
When should I consult a tax attorney?
If you or your spouse are facing legal issues related to taxes, such as estate planning or innocent spouse relief, it is best to consult a tax attorney.