If I File Under Married Filing Separately, Am I Responsible for My Spouse’s Debt? 

If I File Under Married Filing Separately, Am I Responsible for My Spouse’s Debt?

Short on Time? Here’s a quick summary of what’s ahead: 

Married couples have the choice of filing separately or jointly when it comes to their federal income tax returns. 

The vast majority of married couples file jointly, as the IRS extends several tax breaks to couples that file jointly, which usually makes it the more financially sensible option. 

However, when you file jointly, you are automatically taking responsibility and liability for each other’s taxes. This means that if one spouse incurs tax debt, the other spouse is also automatically responsible for that same debt. 

Filing under married filing separately is one way to avoid being responsible for your spouse’s debt. However, as a married couple, there are still implications of your spouse having tax debt with the IRS that you need to be aware of. 

Find out the basics of what married filing separately entails, if you’ll still be responsible for your spouse’s debt in any way, and when it is a good idea to file under this status. 

If you are already facing tax debt with the IRS that you or your spouse cannot pay, don’t leave it any longer. The IRS offers a variety of options to help people resolve and settle their debts, and the sooner you take action, the better the options will be. 

Tax Relief Helpers is a team of tax-resolution experts with over 20 years of experience. We can explain all of your options, help you find the best solution, speak to the IRS on your behalf, and negotiate settlements for your tax debts that will save you considerable amounts of money, time, and stress. Give us a call, and let us help you take control of your tax concerns today. 

What is “married filing separately”? 

Married filing separately is a tax status for married couples who choose to file separate, independent tax returns – each recording their respective incomes, exemptions, deductions, and credits on separate returns – rather than filing a joint return. 

The alternative to married filing separately is married filing jointly. 

When you file jointly, you assume all responsibility and liability for each other’s taxes, debts, and penalties for the year you file. This is called “joint and several liability”. 

If you file separately, you are each only responsible and liable for your own reported income and debts. This means that if you file using married filing separately, you are not responsible for your spouse’s debt, should they incur any. 

The filing status also only applies to taxes, interest, and penalties owed in the period in question. If either spouse owes back taxes from a previous year when you filed separately, e.g. prior to your marriage, this debt belongs to your spouse alone. However, if you file jointly when this debt still exists, the IRS may still intercept your tax refund to cover these debts. 

There is no obligation to file jointly if you are married, although most couples find it is more beneficial to do so. However, this is not always the case, as we will discuss below. 

It is also worth noting that couples can change their status from one year to the next, filing jointly and/or separately as is most appropriate each year.

Should I file separately if my husband owes taxes? 

If your spouse has tax debt from before you were married, it is their sole responsibility and you are not legally responsible or liable for paying it. However, if you file jointly when this debt is still unpaid, the IRS will most likely still attempt to collect it from you by seizing your part of any joint tax refund you are due. 

If this happens, you can apply for Innocent Spouse Status or Injured Spouse Status in order to get your share back, but it is usually easier to pre-empt this and file separately if you want to avoid this happening. For this reason, many married couples find it easier to file under married filing separately until any back taxes have been settled

Similarly, if you file under married filing jointly and one spouse is expecting a large tax bill for the year in question and the other is due a refund, that refund will automatically be used by the IRS to offset the tax owed. This cannot be claimed back, as you have filed jointly and are now jointly responsible for the tax debt, so if you want to protect that refund and manage payment towards any tax debts in another way, filing separately is the way to do this. 

If as a couple you will jointly pay any tax debts owed, it may still be easiest and most financially beneficial to file your returns jointly, as you will benefit from other tax credits that will likely reduce your overall combined tax bill.

Married filing separately to avoid garnishment

Tax garnishment is the way in which the IRS collects unpaid tax debts. The most common of these is wage garnishment, where a portion of your wages is withheld at source and paid directly to the IRS. 

If you are filing jointly and have incurred a joint tax debt for that year, the IRS has the right to garnish both spouses’ wages, and is likely to do so if garnishment becomes necessary. 

Filing separately is therefore one way to avoid this, as the IRS can only garnish the wages or seize any assets of the person legally responsible for the tax return in question. 

However, bear in mind that the IRS can still levy a joint bank account, even if you are filing separately. So if both wages are being deposited into the same account, it is effectively still possible for the wages of both spouses to be seized. 

It’s also worth bearing in mind that if one person’s wages are garnished, the financial stability of the other spouse will inevitably also be affected. So avoiding wage garnishment altogether is always the best option. 

There are multiple ways in which you can proactively avoid wage garnishment if you or your spouse has a tax debt you cannot pay. These include options such as offers in compromise, installment payment plans, and a variety of other settlement options

The earlier you enter into discussions with the IRS to settle your debts, the better the outcome will be, so it’s always recommended to take action quickly. Tax settlement experts such as Tax Relief Helpers are able to help you determine the best course of action and handle all negotiations with the IRS on your behalf. So if you’re concerned about tax debts you or your spouse cannot pay, don’t let it get as far as wage garnishment. Contact us for a free no-obligation consultation and find out your options for settling your tax debt.

When is it a good idea to use married filing separately status?

Married filing jointly status comes with a number of tax benefits and credits that are not available when filing separately. This means that it usually makes financial sense to file jointly, as it tends to result in a lower overall tax bill. 

However, filing jointly also means you are legally 100% responsible for your spouse’s taxes. So if there is any lack of trust in the relationship, or you suspect your spouse is hiding income or falsely claiming deductions or credits, married filing separately is probably the best option. 

There are also a handful of other situations where filing separately is more beneficial. 

The circumstances under which you may be better off filing married filing separately include: 

  • If you don’t want to be responsible for your spouse’s debt, in particular, if you suspect them of misfiling or evading their taxes, or are in the process of divorcing or separating. 
  • If both spouses have a similar amount of income, combining them may push the combined income into a higher tax bracket. 
  • If one spouse has a large tax bill and the other is due a tax refund, which you want to protect. Filing separately will prevent the refund from automatically being used to offset the other spouse’s balance. 
  • If one spouse has significant out-of-pocket medical expenses or miscellaneous itemized deductions. Expenses that exceed 7.5% of your AGI (adjusted gross income) can be deducted, regardless of whether that AGI is based on individual or combined income, so it will usually be beneficial to submit individual returns where the deduction applies against a lower individual income. 

If one or both spouses have income-based student loans. Just as with the medical expenses, the proportion payable is based on the declared AGI, so declaring single incomes rather than joint can result in lower loan repayments.

When to speak to a tax resolution expert

If you file using married filing separately, you may not legally be responsible for your spouse’s debt, but it is still likely to impact you and your marriage in many other ways. 

Taxes are renowned for being one of life’s more complicated, not to mention stressful, aspects of life, and the implications that can come from tax debt you or your spouse are unable to pay can be substantial. 

But… there are always solutions!

Tax Relief Helpers is a team of seasoned experts in tax resolution who will be able to give you individualized advice based on your specific concerns. Give us a call or book a free consultation today, and let us help you find the optimal solution to your tax situation