Episode 90: Family-Related Tax Issues (2 of 2)

After a brief update on coronavirus effects on the tax world, this episode brings a discussion of family-related tax issues.  To start, the filing status chosen has different effects on the tax return.  Specifically, when a married couple files a joint tax return, there could be further issues.  That leads to the difference between injured spouse relief and innocent spouse relief. 

Injured spouse relief applies when one spouse’s refund will be applied to the other spouse’s government debt. 

Innocent spouse relief applies to married couples with tax debt when one spouse dies, there is a legal separation/divorce, or the spouses have been separated for 12 months.  The requesting spouse cannot amend a joint tax return so must file for innocent spouse relief to get the debt divided or if the debt is all connected to the other spouse’s income.  The form requires details about the marriage including education levels, involvement with filing the taxes, and whether there was domestic violence.  Since there is so much to innocent spouse relief, I will be doing a follow-up episode.