Family Issues
The most frequently asked tax questions related to Family Issues
If it costs me more in taxes , why would I file married filing separately ?
Asked Thursday, October 05, 2000 by an anonymous userCPA Answer:
Some spouses have had problems with the IRS in the past and still owe the IRS taxes. When you file a joint return, you and your spouse are both equally responsible for the taxes owed on that return. Any refund you might have been entitled to could be used to pay your spouse's existing liability with the IRS or the state. Lastly, some people do not want their spouse to be aware of all of their financial involvement.
I have been living with my spouse in a common law marriage for the past 3 years . Do I file my tax return using the filing status of joint or single ?
Asked Thursday, October 05, 2000 by an anonymous userCPA Answer:
If at the end of the tax year you lived together in a common law marriage that is recognized by the law of the state where the marriage began or in which you live, you may file as married filing jointly or married filing separately.
Property settlement from divorce settlement - taxable?
Asked Thursday, October 05, 2000 by an anonymous userCPA Answer:
Generally, property settlements "incident to a divorce" are considered tax-free exchanges and are not reportable or taxable.
Generally, a transfer is "incident to a divorce" if the transfer occurred within one year after the marriage ceases, or any transfer persuant to a divorce or separation agreement occurring within 6 years of the end of a marriage.
Generally, a transfer is "incident to a divorce" if the transfer occurred within one year after the marriage ceases, or any transfer persuant to a divorce or separation agreement occurring within 6 years of the end of a marriage.
Alimony - still living in the same house as spouse
Asked Thursday, October 05, 2000 by an anonymous userCPA Answer:
Generally, alimony payments are not taxable or deductible if you live in the same household as your divorced or legally separated spouse.
But, if you are separated under a written agreement, but not legally separated under a decree of divorce or separate maintenance, then you may claim the deduction.
Speak to your local CPA about the deductibility of your alimony payments.
But, if you are separated under a written agreement, but not legally separated under a decree of divorce or separate maintenance, then you may claim the deduction.
Speak to your local CPA about the deductibility of your alimony payments.
Annulment decree payments
Asked Thursday, October 05, 2000 by an anonymous userCPA Answer:
Yes. Annulment decree payments qualify as deductible alimony payments. They also would be considered taxable income to the recipient. They should be reported as alimony (adjustment or income) on IRS Form 1040 page 1.
Estate tax - Unified Credit
Asked Wednesday, September 27, 2000 by an anonymous userCPA Answer:
For decedents and gifts made in the current year, a unified credit is allowed which is the equivalent of a $5,120,000 dollar exemption is subtracted from the tax calculated on the taxable estate.
For 2012 the $5 Million exemption may be increased for inflation.
New for 2011 and 2012 is a concept named portability which allows a surviving spouse's estate to use any portion of the exemption amount not used by the other spouse’s estate.
For 2012 the $5 Million exemption may be increased for inflation.
New for 2011 and 2012 is a concept named portability which allows a surviving spouse's estate to use any portion of the exemption amount not used by the other spouse’s estate.
Form to expedite the closing of the decedent's estate
Asked Friday, September 22, 2000 by an anonymous userCPA Answer:
The executor may file Form 4810 for a prompt assessment. Without filing Form 4810, the IRS has three years from the due date of the return to make assessments.
Divorced in December - Do I file using joint or single filing status ?
Asked Thursday, September 21, 2000 by an anonymous userCPA Answer:
Regardless of the date, if you are divorced during the tax year or have a separate maintenance agreement, you are treated as unmarried for the whole year. If you remarry before the end of the year, you will be treated as filing a joint return or you may elect to file as married filing a separate return. An unmarried person with a child may use the filing status of head of household. A unmarried person without a child will be treated as single. Speak to your local CPA before you file your tax return.
Is there a deadline in which a person can select the Innocent Spouse Relief election ?
Asked Thursday, September 21, 2000 by an anonymous userCPA Answer:
Yes. The taxpayer has until two years from the due date that the IRS first attempts to collect tax from you on the joint return to make the innocent spouse election. The election is filed on Form 8857.