Filing Separately Consequences

Today TaxMama hears from Greta in New York with this question. “I am thinking of filing a separate tax, without my husband. I pay most of the bills. Can I claim the house; or do we have to divide it?”

TaxMama answers a question on Tax

Dear Greta,

That question is more complex than you might realize. You may want to meet with a good, tax professional who is familiar with your particular situation, as well as New York state laws.

Some issues that impact your decision:

1) New York is not a community property state.
http://www.fairmark.com/spousal/comprop.htm
a) So, if he made some of the mortgage payments, you probably may not deduct the interest expense on those payments.

b) If he paid any of the property taxes, again, you may not be able to deduct those payments.

2) There are a variety of deductions and credits you lose when you use the married, filing separately (MFS) status.

3) If you itemize, he will have to itemize, as well – even if he has no deductions to take.

4) If one or both of you are on Social Security, you lose the $32,000 exclusion for Social Security benefits. 85% of the benefits become immediately taxable.
http://www.irs.gov/newsroom/article/0,,id=179091,00.html

There are other issues as well.

The important thing to consider, of course, is why you want to file separately. Your reasons may override all my objections.

Some good reasons to file separately:

1) He can’t get his act together and is preventing you from filing on time. Definitely, do NOT wait for him – file!

2) He has a business and you’re not sure he’s reporting all his income. You do not want to be signing a joint return with him. You would be held liable for his unreported income when IRS catches him.

3) He has a balance due because he didn’t withhold enough or make his estimated tax payments. Filing jointly makes you liable for his carelessness.
4) You pay all the bills anyway. But, make sure he doesn’t also take deductions for the same expenses!

Just some things to think about – or to discuss with your own tax professional.

Good luck!

And remember, you can find answers to all kinds of questions about marital problems and other tax issues, free. Where? Where else? At TaxMama.com.

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