Did you know that the implications of your spouse’s history of IRS problems on your finances? Many people mistakenly think that their spouse’s tax problems are not their own. When you file joint taxes as a married couple, you are not only entitled to half of your spouse’s income and assets, but also to tax matters. This means that the IRS may hold you accountable for your spouse’s past tax recklessness and expect you to pay them. Here are some things you can do to minimize your accountability. If you don’t want to pay your spouse’s tax debt:
Stay away from our money concept
If you don’t want to be held accountable for overpaying or underpaying taxes that your spouse is stupid, separate your income. Maintain separate bank accounts. If there is a problem with the IRS and they choose to charge your joint bank account, you will lose all money including your money held in that account. As far as the IRS is concerned, there is no difference in the funds held in the same bank account and they will confiscate them regardless of who owns it. In some cases, a person may be able to recover their income from the IRS but this is a long and arduous process. So to avoid problems, open a separate tax account even after the “do”.
Don’t own shared assets:
Make sure that the property you buy before and after marriage is solely owned by you, proving that you are the sole proprietor. If your spouse does not own your joint assets, the IRS cannot confiscate them to make up for your spouse’s tax payments. Those assets can include real estate, jewelry, equity, joint findings, cash savings, etc.
Get the Prenuptial Agreement signed
While a prenup isn’t the most romantic thing in the world, it can definitely save you a lot of tax trouble. This is especially true if you live in a community property state. In these states, obtaining a signed prenup from your spouse is probably the single most important way to protect your assets from state and federal tax laws.
File your taxes separately
This is a very important step to protect your income and holdings. While this means that you will have to pay more in taxes when you file individually than together with your spouse, a few dollars paid more today is certainly better than losing thousands or more later in the event of a tax problem. If you file your taxes separately from those you marry, the IRS won’t be able to hold you responsible for your spouse’s tax issues and they definitely won’t be able to get you to pay them. Also, filing your taxes independently of your spouse may prove very useful if you have to file for bankruptcy. Only the responsible spouse has to apply which means that the uninvolved partner can live his life on good credit. Even one person with a good credit rating when the other spouse has filed for bankruptcy can be a lifesaver, simply because bankruptcy can wreak havoc on your credit score.
If you are unsure about what to do to avoid the burden of paying your spouse’s taxes, contact a Dallas tax attorney for advice. Alternatively, you can also contact an accountant and ask him to help you.
Ideally, you should try your best to avoid getting into trouble with the IRS, simply because they can cause a lot of trouble including imposing hefty fines and steep interest rates on you. If you don’t give in, they might even try you on criminal charges, so you have to be very careful when dealing with tax matters to avoid opening the proverbial Pandora’s box.