Monday, March 3, 2014

Help! The IRS took our tax refund for my spouse's past due child support.

This is a common situation that is seen frequently in tax offices all across America.  Either, the spouse is  afraid to file with their significant other due to fear of refund being applied towards past due debt  or the spouses file together and neither  one gets any of the tax refund.

Most people tried to avoid this by filing Married Filing Separately. This is not  a good alternative.  Married Filing Separately  disallows you from claiming any tax credits. Tax Credits you may be missing out on are Earned Income Credit, Child Tax Credit, Education Credit, Child Care Credit, and Retirement Savings Contribution Credit.

Instead of robbing yourself of free money, you can file Married Filing Jointly then submit an Injured Spouse Allocation form. This way you can help pay off some of your spouse's debt and get your portion of the refund back from the IRS.

You may be entitled to injured spouse relief if you file a joint return and all or part of your refund is applied against your spouses’ past-due federal tax, state income tax, child or spousal support or federal nontax debt, such as a student loan.

 For the IRS to consider you an injured spouse, you must have made and reported tax payments, such as federal income tax withheld from wages or estimated tax payments, or claimed a refundable tax credit, and not be legally obligated to pay the past-due amount.

Please keep in mind that you are not entitled to Injured Spouse Relief if the amount owed is due to debt you are responsible for. It has to be only your spouse's debt.

Tax Charm blog is not legal or professional advice.

You are reading Tax Charm blog at your own free will and you are taking the information provided at your own risk.

I am the legal copy righter of this blog, you may not use, reprint or publish information from this blog without my permission.


No comments:

Post a Comment