Taxes

If the husband’s and wife’s names and signatures appear on a state or federal personal income tax return, both are liable for the taxes. If a couple files jointly, the Internal Revenue Service generally holds each spouse responsible for the entire debt.

In some circumstances, a spouse who signed a joint tax return can be excused from liability if the spouse can prove that he or she is an innocent spouse. A wife or husband can be considered an innocent spouse if he or she did not know--and had no reason to know--that the tax return understated the amount of tax actually due. 

That is often hard to prove. For example, the Wall Street Journal reported a case in which the wife of an IRS auditor did not know that her husband was taking bribes, but neither did she ask how they could afford expensive education for their children and country club dues on his government salary. The wife, as well as the husband, was found liable, for $150,000 in unpaid taxes and penalties. (The husband also went to jail.)

On the other hand, the IRS gives the following example of a case in which a taxpayer would be entitled to partial protection as an innocent spouse:   “At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. The understatement of tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. The understatement of tax due to the $5,000 of gambling winnings will not qualify for relief.”

In years past, there was what some called a “marriage penalty”by which a married couple would pay higher federal taxes for their combined income than they would pay if they were single. As of 2004, the marriage penalty has been eliminated, for the most part, and the couple will pay approximately the same total amount of taxes whether married or unmarried.