Taken from my website Taxgirl.com are some of the most frequent questions I receive about filing status. As always, these answers are not a one size fits all, as situations vary from person to person. I hope, however, they will shed some light on common questions and problems that arise:

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Taken from my website Taxgirl.com are some of the most frequent questions I receive about filing status. As always, these answers are not a one size fits all, as situations vary from person to person. I hope, however, they will shed some light on common questions and problems that arise:

 

Common Law Marriage Accepted by IRS?

Taxpayer asks:

My girlfriend and I were common law married in 2005. We filed our own taxes for 2006. In 2007, we went to a tax accountant. He says we cannot file as married on our tax return. I say we can since we’re common law married. Who’s right? We live in Pennsylvania.

Taxgirl says:

Unfortunately for you, your accountant is right on this one. For the most part, the feds follow the state’s definition of married (as we as separated and divorced) when it comes to tax status; a notable exception is gay marriage which is not recognized at the federal level.

And you’re right that it would make sense to file as married on your federal income tax returns if you’re legally common law married—tax returns are often considered good evidence that you treated yourselves as actually married.

All of that said, Pennsylvania no longer recognizes common law marriages. After some back and forth in the courts, the Pennsylvania Legislature passed a law which abolishes new common law marriages on or after January 1, 2005. Common law marriages prior to that date may be grandfathered (assuming you can prove it).

As of this year, only Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Oklahoma, and Texas plus the District of Columbia recognize common law marriage. Pennsylvania is one of five states which recognizes common law marriages established before a date certain; the others are Georgia, Idaho, Ohio and Oklahoma. Utah recognizes common law marriage if verified by a court (though I’m not quite sure why you just wouldn’t get married in that case). So, sorry to be the bearer of bad news here, but it looks like you have to either each file as single or consider getting legally married.

Almost Married

Taxpayer asks:

I’m getting married in March. Since I will be married when I file my taxes, do I file married?

Taxgirl says:

Nope. For federal income tax purposes, your filing status is determined as of the last day of the tax year. If you were single on that day, you file as single (or head of household, if applicable) even if you are married when you file your tax return.

Whether you are considered married is determined by state law; the exception to this rule is single sex marriage which is not recognized by the federal government even if legal in your state.

Congratulations on your upcoming marriage and good luck!

Should I get married?

Taxpayer asks:

Last year, I moved in with my boyfriend at his condo. He lost his job so I paid most of the bills. I paid the mortgage directly for most of the year. I also paid some of his credit card bills, the car payment and some of his child support payments so he didn’t get behind again. Can I take any of these things off on my taxes? Would it make a difference if we got married? Whether you are considered married is determined by state law; the exception to this rule is single sex marriage which is not recognized by the federal government even if legal in your state. Congratulations on your upcoming marriage and good luck!

Taxgirl says:

You cannot deduct the cost of credit cards and car payments for personal use. Personal loans are never deductible.

Child support is likewise not deductible; in fact, child support is considered “tax neutral” (neither deductible to the payor nor taxable to the payee), unlike spousal support. Mortgage interest is only deductible when you’re legally responsible for the note. Here, you’re clearly not since you indicated that it’s your boyfriend’s condo. Now for the bigger question: If you got married, it would only change the mortgage bit in terms of your deductions. Your husband would be able to take the mortgage interest deduction and charge it against your income. You’d also be able to claim an additional personal exemption against your income, assuming he’s still not working.

Of course, this would not apply to last year—just this tax year if you got married by December 31. I’m actually asked a lot whether it makes more sense to be married—or not—based on taxes. The answer is that it always depends on your situation from a tax perspective, though it tends, under the current system, to be more beneficial to file as married than single. Again, really facts and circumstances dependent. That said, I run a business with my husband. And as I approach my own anniversary (it’s next week), I can honestly say that a business is not the same as a marriage. In business, you tend to make decisions that are largely based on dollars. In marriage, not so much. This is not to say that financial decisions aren’t an important consideration in a marriage. It certainly is (you want to think about, for example, whether your potential spouse and you are compatible in terms of how you view money). But marriage is tough enough between two people: don’t drag Uncle Sam into it, too.

And a quick question from the comments: Speaking of marriage, if a marriage is legally annulled is it true that the two parties must amend their tax returns from Married Filing Jointly to Single for those years? Sounds like a lot of trouble!

My answer: Yes. An annulment is as if the marriage never happened—and that’s how the IRS sees it. The parties must amend the returns.

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