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Mid-year marriage and taxes

Anchorage, AK |

My husband and I married mid-year 2011. His taxable income is 4 times what mine is. Only a last half year of our combined incomes is joint income and the first half went to each of us individually. How should we split the very large income tax bill? Should we use the effective tax rate or the marginal tax rate to determine the tax liability on the latter half of the year, when we were married? It makes a huge difference. Thanks.

Attorney Answers 3

  1. Sorry, but this is a marital issue not a tax issue. The IRS considers the entire amount to be a joint debt. I hope this helps.


  2. The marginal tax rate has nothing to do with the total taxes paid. That’s only the rate on the last dollar earned. I would suggest that you allocate the taxes owed pro rata to the adjusted gross income of each. For example, if he earned $200,000 and you earned $50,000, then he should pay 4/5ths of the taxes and you would pay 1/5. Adjustments may be in order if one of you has proportionately more deductions. Also one could argue for allocating based on taxable income, but that includes all of the deductions, which complicates matters.
    Or you could calculate the first half as single filing and the second half as married filing jointly to get a pro forma figure for the total taxes that each of you would have paid under that scenario. Then apply that ratio of taxes to the actual amount of taxes that you owe this year.

    My guess is that the allocated amount would be less than either of you would pay if you filed as single persons (which you can’t, of course.) You should ask the accountant to run the numbers on single filing. It might make you both feel better about the allocated amounts (unless the “marriage penalty” bites).

    DISCLAIMER—This answer is for informational purposes only under the AVVO system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin

  3. First, your status at the end of the year determines your filing status for purposes of the IRS income tax. So if you were married at the end of the year, your filing options are to file as maried filing jointly, or married filing separately.

    Now in making the decision on which calculation to use in preparing your taxes, you should choose the option that creates the lowest tax obligation or results in the maximum refund. In most instances, the effective tax rate would result in a lower tax obligation. However, the determination of which method to use requires more information than you provided. You should consult a CPA to determine which method is most beneficial to your situation.

    The information provided is for informational purposes only and no attorney-client relationship has been formed. Attorney Kerriann Sheppard is the Managing Attorney of the Law Offices of Sheppard & Associates, a Taxation Law Firm specializing in helping taxpayers nationwide resolve their IRS back taxes and restoring peace of mind. Call (800)935-9609 for a Free Initial Consultation Today!

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