My husband and I always file seperate. We have 3 children together. I always got the Child Tax Credit for our kids. He always only claimed himself. We recently discovered he owes 65,000 in taxes and we won't know about a payment plan until we file previous returns. If this year we file married together and he claims our children, head of household, and files an amendment to claim them on the previous 4 year returns, will that amount lessen? If so how much will the deduction be for each child. He has to file taxes his for 2014-2017.
Here is how I handle cases where clients are in trouble with the IRS. I get their records from the IRS. This includes their Account records, their income records and their tax return records. I also get a financial statement from the clients. I then analyze the records and the financial situation to determine what solutions the client may qualify for. If it is to the client's benefit to spend the money and time to amend returns and lower the amount due then that is what I recommend.
The first step is to get into compliance by getting all past due tax returns filed. It may or may not be best to amend your returns to joint and include your husband. a detailed analysis needs to be done to make that determination and then you need to know and understand the benefits and consequences of doing so. Or it may be best for your husband to file separately and resolve his situation separately. Sometimes it is better to owe the IRS more because it can make it easier to qualify for an offer in compromise. (where the IRS agrees to reduce the balance).
Absolutely do not file jointly for 2017. Since your husband has a large balance due, the IRS will take the entire refund and apply it to the past due balances. I do not know if you self-prepared your returns, but if you did, you need to have the returns reviewed by a tax professional. In addition, you need a good tax attorney to help your husband enter into an installment agreement.
You can hire a good attorney anywhere in the country that handles IRS tax controversies as all of the work is done by call and fax.
I hope this helps you!
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This is now a complicated situation and you should consult with a tax professional to help you through this matter. Do not file amended returns or joint returns until you consult with counsel. These actions could have serious negative tax consequences and the tax implications of each must be considered prior to taking action.
Mr. Lively is a Certified Tax Specialist by the State Bar of California Board of Legal Specialization. Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.
The exemption amount for each child changes every year - its around 4000. The deduction amount depends on whether you use the standard deduction or you itemize. If you itemize, then it won't make a difference. Finally, if you qualify for the earned income credit, the amount of credit you get will depend on your income. There are other credits for child care expenses that you may be eligible for. I suggest you file those amended returns ASAP.
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. Answering this question does not create an attorney-client relationship or otherwise require further consultation.
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