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Is My Wife on the Hook for Taxes I Owe?

Question: I was married in July of this year. I owe back taxes but my wife does not. We plan to file separate tax returns. I know the IRS will apply any refund I may get towards my balance. Will my wife’s refund be affected?

–Lawton Fox, Turlock, Calif.

Answer: Generally speaking, a married couple filing separately should find that one spouse’s refund should not be impacted if another spouse owes taxes. California, however, considers what is called community income, requiring income earned during the marriage to be split evenly. This includes wages, earnings and property shared while married. (Other requirements vary from state to state, so be sure to check with a tax professional.) Because of the community income rules, part of your wife’s income could be seized to cover the taxes you owe, says Jackie Perlman, a tax research analyst with The Tax Institute at H&R Block.

While filing separately can offer some protections, couples going this route have certain limitations to consider. For example, one spouse cannot claim the standard deduction if the other is itemizing, according to the Internal Revenue Service. And married couples filing separately cannot claim education credits, the earned income credit, the student loan interest deduction, or the tuition and fees deduction.

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