Should we file Jointly or Single, or do we have that chose?

Question

I just got married last year and we bought a house. I owe the IRS taxes from my business back in 1999. They have been taking my refund ever since, but they know that I can not pay them. Now that I'm married and we bought this house, should we file joint using the long form 1040 or is there a way to file so my Wife can claim the interest we paid on the house. Her name is first, since she makes more money than I. I just don't want a lien on our house. Any help or suggestions would be helpful

Answer 1

I suggest you use the Taxpayer Advocate Service

see the link below to the NationalTaxpayer Advocate Service

the advocate service is free

Answer 2

Well, you have a LOT of issues going on here.

First off, if you didn't want the potential of a tax lien on your home you should not have bought one. There's nothing you can do to prevent them from filing the lien but it's not likely that they'll exercise it if there isn't sufficient equity in the home yet. If they do put a lien on it, it WILL be settled when you sell the home, however.

Generally you'll have the lowest tax liability by filing jointly. If your wife files a separate return (Married Filing Separately, NOT Single) she can itemize her deductions and claim the interest and property taxes paid. If she does this you MUST itemize your deductions as well, even if the amont is zero. Her refund WILL be protected if she files a separate return.

Your wife can file an Injured Spouse Allocation, Form 8379 to protect her share of any refund if you file a joint return. The IRS will determine what her share of the refund is, if any. If you go that route, file a PAPER return, do NOT e-file! Attach the Form 8379 to your joint return.

CAUTION: If you live in a Community Property state special rules will apply as to the allocation of income and allowable itemized deductions if you file separate returns. These rules will also affect how any refund is split if you file a joint return.

It would be a wise idea to consult with a qualified tax adviser -- a CPA or tax attorney, NOT a storefront tax prep mill -- and see if you can clear your tax debt with an offer in kind or set up a payment plan. If you can do that AND stick to the agreement you won't have to worry about a tax lien on your home or any further confiscation of your tax refunds.

Answer 3

You aren 't allowed to file single if you're married. You can file joint, or as married filing separately.

If you owe taxes and don't pay them, but have assets, then eventually the IRS will probably find out about it and seize the asset or put a lien on it. This can happen whether you claim a deduction for mortgage interest and property taxes or not. You owe the taxes, so they could legitimately wonder why you would buy a house rather than pay off your taxes first.

Answer 4

File jointly, go long form , claim the interest and let the IRS take the rest to help pay off or pay off your IRS debt. If you plan on being married forever I assume, the debt is just going to hang over your heads and interest and penalties are just going to continue to add up more and more. Get rid of the debt now so you can go on in your marriage and not worry about this every year at tax time. IMO