Monday, December 28, 2009

Has anyone filed Injured Spouse 8379 when the injured spouse paid all the tax and non-injured earned little?

What to expect with 8379 in this situation: tion: 1. Non-injured spouse paid no tax and would have no tax due regardless of filing status. 2. Injured-spouse paid all tax. $1k refund if MFJ, $50 refund if MFS. How much to expect back?Has anyone filed Injured Spouse 8379 when the injured spouse paid all the tax and non-injured earned little?
If you live in a community property state, they will split the income and expenses and credits straight down the middle.





If you live elsewhere, they will proportion the expenses and credits to the percentage of income for both parties.





Edit:


From instructions F8379 http://www.irs.gov/pub/irs-pdf/f8379.pdf





Specific Instructions


Line 6. If you live in a community property state, special rules


will apply to the calculation of your injured spouse refund.


Community property states are: Arizona, California, Idaho,


Louisiana, New Mexico, Nevada, Texas, Washington, and


Wisconsin.


Generally, income, deductions, credits, and expenses are


allocated 50/50 between spouses who live in a community


property state. Overpayments are considered joint property


and are generally applied (offset) to legally owed past-due


obligations of either spouse. However, there are exceptions.


The IRS will use each state鈥檚 rules to determine the amount, if


any, that would be refundable to the injured spouse. Under


state community property laws, 50% of a joint overpayment


(except the earned income credit) is applied to non-federal tax debts such as child or spousal support, student loans, or state income tax. However, state laws differ on the amount of a joint overpayment that can be applied to a federal tax debt. The earned income credit is allocated to each spouse based on each spouse鈥檚 earned income. For more information about community property, see Pub. 555.Has anyone filed Injured Spouse 8379 when the injured spouse paid all the tax and non-injured earned little?
The answer above is NOT correct...being in a community property state has no bearing on a federal income tax return... the injured spouse who paid the most tax would get his full refund back...it is up to the injured spouse to allot the dependents on the form so that the least amount of his taxes are withheld on the total paid...you can achieve that allocating dependents (if you have kids)...play around with the numbers to see how the numbers come out before you finalize the document and submit it.





It is best to figure the form out several ways, just like some years a couple is better to itemize; some years it doesn't help, and they are better to take the standard deduction.



Or, just let them take it and get the debt paid off

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