Qualifying Widow

A taxpayer can file as a qualifying widow(er) if she or he meets all of the following tests:

  1. The taxpayer’s spouse died in one of the two previous tax years. If, say, taxpayer’s spouse died in 2006 and taxpayer satisfies tests 2 through 4 below, then she (or he) can file as a qualifying widow(er) in 2007 and 2008.
  2. The taxpayer has not remarried in the current tax year.
  3. In the year the spouse died, the taxpayer was eligible to file a joint return.
  4. The taxpayer maintains for the entire year a household that serves as the principal residence for the taxpayer’s dependent child, stepchild, adopted child, or foster child and the taxpayer pays more than 50% of the cost of keeping up such household. The category of foster children includes grandchildren and other children who are members of the taxpayer’s household for the entire year. Temporary absences for school, illness, vacation, military service, and time spent at a juvenile detention center count toward the residency test for dependents and household members.

Although a qualifying widow(er) files an individual return at the more favorable married-filing-jointly tax rates, she or he cannot use married-filing-jointly status. In other words, a qualifying widow(er) is able to claim a personal dependency exemption and exemptions for dependents and household members but cannot take an exemption for the deceased spouse or lay hold of other benefits associated with married-filing-jointly status.

Supplementary relevant articles on the topic of qualifying widow(er) filing status are listed below:

Many happy returns, Roger

Married Filing Separately

There are two major reasons for a married individual to file a separate return. One reason is to avoid joint liability by seeking innocent spouse relief. The other reason is to increase allowable itemized deductions for several categories of expenditures by lowering the floor or threshold amount that these expenditures must exceed in order to be deductible.

(Note: To enhance the readability of this article, the wife is depicted as the innocent spouse; of course, one can, with the same result, substitute husband for wife.)

Before I discuss the reasons for filing separately, the reader should be aware that if one spouse elects to file separately, then the other spouse must also file a separate return. In addition, if the spouse who files separately chooses to itemize deductions rather than take the standard deduction, the other spouse must also itemize deductions.

Innocent Spouse Relief
Each spouse who signs a joint return is individually responsible for any taxes due as well as the accuracy of the return. But a wife who files separately is not responsible for either the husband’s tax liability or the accuracy of his return.

However, the issue of joint liability for a married couple is more complicated. After filing a joint return, a wife may seek relief from the negative consequences of the husband’s actions, namely, relief from a deficiency assessment the proximate cause of which is the husband’s decision to file an erroneous return. To qualify for relief, the wife must file Form 8857 (Request for Innocent Spouse Relief) with the Internal Revenue Service and satisfy the following conditions:

  1. The couple’s tax liability is understated because the joint return is corrupted by omissions (income earned but not reported) and erroneous items (unjustified deductions and credits).
  2. When she signed the return she didn’t know, or have reason to believe, there was an understatement of tax.
  3. All the facts and circumstances show it would not be fair to hold her responsible for the understatement of tax.

An innocent spouse may also seek relief under separation of liability. A wife seeking separation of liability relief is required to pass the following tests:

  1. The wife filed a joint return.
  2. The wife is no longer legally married to, or separated from, her spouse. Alternatively, the wife will pass this subtest if she has been living apart from her spouse for at least twelve months when Form 8857 is filed with the IRS.

Notice that the burden of proof is on the spouse seeking separation of liability relief.

In addition, a spouse who fails to qualify for either innocent spouse relief or separation of liability relief may petition for equitable relief. The heuristic for equitable relief is a facts and circumstances test, and the burden of proof is on the spouse seeking relief.

Finally, injured spouse relief is available to a wife whose husband has not paid child support, spousal support, or student loans and other federal debts and a portion of the couple’s overpayment of tax on a joint return is appropriated by authorities to settle in part, or in full, these past-due obligations. In this set of circumstances, the wife can claim injured spouse relief and recoup her portion of the overpayment if she meets all of the following tests:

  1. She is not required to pay her husband’s delinquent obligations or past-due loans.
  2. She earned and reported income on the joint return.
  3. She made and reported income tax payments on the joint return.

Lowering the Floor for Itemized Deductions
A key intermediate figure on a joint return, adjusted gross income (AGI), combines the incomes of two individuals; this feature of a joint return makes it difficult for a couple to take advantage of available deductions by itemizing. Specifically, many are subject to a 2%, 7.5%, or 10% of AGI floor (viz., the threshold amount itemized deductions must exceed in order to produce a tax benefit); the higher the AGI, the more difficult it is for a joint filer to meet this threshold. But if husband and wife file separate returns, especially when, say, large medical expenses are attributable to and paid by the husband, then the applicable floor of AGI will be lower and the corresponding odds higher that the husband, as a separate filer, will realize a tax benefit by itemizing.

The flip side is that several credits and deductions are available only to joint filers. For example, a married individual who files separately is not eligible to claim the child and dependent care credit, the earned income credit, education credits (e.g., Hope and lifetime learning credits), or the credit for the elderly or permanently disabled. Moreover, a separate filer is barred from claiming an individual retirement arrangement (IRA) deduction for a nonworking spouse or converting from a traditional IRA to a Roth IRA, deducting student loan interest, or writing off up to $25,000 in losses from real estate rental activities. For more information on the advantages and disadvantages of filing separately, click on and .

Additional relevant articles on married-filing-separately status are listed below:

Many happy returns, Roger

Married Filing Jointly

Just in case both spouses report income on a calendar-year basis or use the same fiscal year and neither spouse is a nonresident alien at any time during the tax year, the couple is eligible to file a joint return if it meets any one of the following tests:

  1. The couple is married and living together on the last day of the tax year.
  2. The couple’s decree of divorce or separate maintenance has interlocutory status at year-end, that is, it is not finalized.
  3. The couple is, and has been, living together as common-law husband and wife in a state that recognizes common-law marriage.

In the event a U.S. citizen is married to a nonresident alien, the couple can elect to file a joint return if they agree to pay taxes on worldwide income and provide (or make available) the books, records, and other information the Internal Revenue Service needs to calculate their tax liability.

If a spouse dies during the tax year and a separate return is not filed by an executor or administrator for the decedent spouse, the surviving spouse can file a joint return if he or she does not remarry in the remainder of the year and, on the date of decedent’s death, the couple meets at least one of the three tests listed above.

For federal income tax purposes, marriage is defined as a legal union between one man and one woman; federal income tax law trumps any state law that sanctions marriage between individuals of the same sex. In short, a same-sex couple cannot file a joint federal income tax return. For more information, click on .

Additional relevant articles on married-filing-jointly status are listed below:

Many happy returns, Roger

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