You want to marry someone who owes IRS penalties and interest How do you protect yourself?

Answer 1

Understand that the IRS is going to collect what it is owed.

If you marry this person, that is going to affect you directly or indirectly.

To the extent that your spouse's income is going to pay taxes and other debts, your spouse cannot help pay the rent/mortgage, utility bills, car payments, grocery bills, credit card bills, and so on. YOU are going to have to pay more than your fair share of all of the other household expenses and live a poorer life because your spouse is going to be spending all of his money paying back his debts.

And people seldom have just a tax debt. If he is so far behind in taxes, he probably has a bunch of other bills, maybe many that you don't know about, that he is going to have to pay off too.

So, do you really want to spend the rest of your life (till death do you part?) carrying your spouse and paying their bills?

Why the rush to get married? Is there some sort of marriage emergency? Open your eyes. When you marry someone, you get them and all of the good and all of the bad. You have to assume that the baggage they bring with them (financial and non-financial) is going to become your problem, too. Why don't you give this guy/gal some time to straighten out their finances and show that they can be responsible before making the commitment?

OK. So you've decided you're going to get married anyway.

As far as taxes go, the most important thing you can do is to make sure you are NOT getting a refund at the end of the year. If you don't have a refund coming, no one can take it away from you.

Most people get a refund. They get a refund because they pay far more tax every week from their paycheck than is required. At the end of the year when they add up their taxes, the total is far more than was required and then they rush to file their taxes and get a refund of the overpayment.

Reduce the amount of taxes being withheld from your paycheck. Get a new Form W-4 from your employer's payroll or HR office. Claim more withholding allowances. (Hint: Form W-4 asks for withholding allowances, not exemptions. Most people mistakenly think they have to fill in the same number of withholding allowances as exemptions.)

Claim enough withholding allowance so that at the end of the year you are not getting a refund and so that you don't owe the government more than $1000.

If you want to see how much tax will be withheld by claiming different numbers of withholding allowances use this calculator:

http://www.paycheckcity.com/NetPayCalc/netpaycalculator.asp

If you are eligible for the Earned Income Credit (EIC), ask your payroll office for Form W-5 in addition to W-4. Filling out W-5 will allow you to receive a little bit of your EIC payment with each paycheck instead of in one big lump sum at the end of the year.

If you have a refund coming at the end of the year and file jointly, the IRS will take your refund and use it to pay your spouse's taxes. You can file separately to avoid this, but filing separately will cost you a LOT more taxes (so you lose either way) and you will be ineligible for certain benefits such as a Roth IRA, thus hurting your future.

Alternatively, you can file jointly and then file an injured spouse relief form. The form is rather complicated and it will take months to process. But they will return the overpaid taxes attributable exclusively to your income. But, again, you can skip this step if you don't overpay your taxes in the first place.

And, finally, visit a good family law attorney before you get married. Get a strong pre-nup drawn up. Financial problems are a leading cause of marital discord. If you don't want to end up having to pay your future spouse's bills long after the marriage has ended, you need to get a pre-nup in place before you get married.