Taxation and Couples

Married partners almost always share something. Is that, though, a positive thing when it comes to filing tax returns? Filing a joint tax return normally results in comparatively low taxes. The IRS gives married couples the choice of filing jointly or separately. While the IRS supports spouses to file their tax returns together by providing tax breaks to those who do, there are certain cases where filing separately is preferable.

Couples will file joint returns if they are considered married and the decision is taken by consensus. On a joint return, the couples can be held responsible individually as well as jointly for the tax and any penalty due on the joint return (“Filing Status”). Secondly, married couples can also file separate tax returns. When using this option, both spouses use the same system for claiming deductions; therefore, if one of them itemizes, the other must follow suit.

Missing Person Determination and Guardianship

State laws provide different conditions that must be met to qualify a missing person as legally dead. Typically, a person cannot be declared dead after being reported missing for two years. However, during the interim, a guardian should be appointed to handle some important duties if the missing person. Therefore, the law classifies Jane as a married person for tax purposes.

If appointed guardian, the IRS requires the person to file a joint tax return with the missing spouse. The joint return would allow Jane to take advantage of the reduced rate schedule, request a personal exemption and enjoy the increased standard deduction. However, before filing a joint return, Jane should first be appointed as Jim’s guardian. Choosing to file this way has some risks. For instance, Jane is not aware how much income her husband earns currently or whether Jim is even alive. Nonetheless, should she file jointly, the innocent spouse provision would protect Jane from tax on income that her husband may be earning.

One hurdle of the situation is that even though the IRS may know of Jim’s Status, the agency is prohibited from sharing information on taxpayers including their current place of residence (”Disclosure Laws”). Therefore, it is unclear what the agency would do, should Jane decide to file a joint return. Jane could also file for a divorce after which she can now file as a single taxpayer. Alternatively, if her husband is declared legally dead, Jane can file as a single taxpayer.

Conclusion

As can be seen, Jane cannot be protected by the abandoned spouse rules because she does not have a child. Moreover, the time that Jim has gone missing is not sufficient to declare him legally dead; this shows that the law recognizes Jane as a married person. Further, Jane cannot file a joint return because even though the IRS may have contact information on her husband, the agency is not in a position to disclose such information. In this situation, Jane should first file for a divorce after which she can file as a single taxpayer. However, since Jane has not been living in the same household with her husband for the past six months, she can also file as head of household. This option will not only lower Jane’s tax rate, but will make her eligible for higher tax credits and deductions.

Works Cited

”Disclosure Laws.” Irs.Gov, 2015, https://www.irs.gov/government-entities/federal-state-local-governments/disclosure-laws.

”Filing Status.” Irs.Gov, 2016, https://www.irs.gov/publications/p17/ch02.html#en_US_2016_publink1000170748.