Need help with filing status (& commingling)

[mowiss]

Hi all,
My husband & I split up last July. He has a job, I don't (I have no human capital, he does although he's only making half what he did before layoff). I have an inheritance (quite moderate) that I've so far properly protected from commingling, and I very much want to keep it that way.
If we file jointly, my very meager (~$4k or so) returns (now, this & the next scenario are only as alleged by my STB ex) will incur a tax bill of roughly $2500.
If we file married/separate, he claims I'll owe much less, like maybe $500.
My question is: If I do the married filing separate and pay less, could that in any way endanger the uncommingled status of my father's money?
Just wanting to get an idea before facing a tax specialist. Also not wanting to piss him off for any reason.

[Gardening Grandma]

f we file jointly, my very meager (~$4k or so) returns (now, this & the next scenario are only as alleged by my STB ex) will incur a tax bill of roughly $2500.
If we file married/separate, he claims I'll owe much less, like maybe $500.
My question is: If I do the married filing separate and pay less, could that in any way endanger the uncommingled status of my father's money?

Whichever way you file, should have no effect on your inheritance. As long as you are keeping it totally separate and in your name only, that should not be an issue.

I would hot, however, take his word that filing one way or the other would be to your advantage. I'd figure it out both ways and then decide.

[Plain Old Petunia]

If we file jointly, my very meager (~$4k or so) returns (now, this & the next scenario are only as alleged by my STB ex) will incur a tax bill of roughly $2500.
If we file married/separate, he claims I'll owe much less, like maybe $500..

This makes no sense to me. Almost always, MFJ is better than MFS. Are you remembering what he said backwards?

If you do MFS and your income is 4k, you will have NO federal income tax liability if your spouse does not itemize. If your spouse does itemize, you will have a federal income tax liability of $30.

[Savoir Faire-Demogague in NJ]

You should speak with a divorce attorney, hopefully you have on already...do it ASAP!

[moon/Laura]

moving to the TAX board.

[mowiss]

Feb 20, 2012 17:59:15 GMT -5 moon/Laura said:

moving to the TAX board.

Well I guess it's a good thing I was asked whether I got the STB ex's info bass-ackwards, because I could actually swear I did post this on the tax board...so anyway, good call.
Now, I should probably say at this point (or should already have said in original post) that STB ex is a *fairly* honorable man, so I take what he says as "probably sorta likely to be relatively true." OTOH, we are talking about a man who pretty much knows he's going to be owing me alimony if & when I do file the papers.
Onward. Things got interesting when he introduced IRS publication 555. Up to that point, I thought heck, Im not gonna have to even file because of what's taxable was less than $3700. But 555 states when MFS I have to take both half his income, and half his deductions (probably standard in this case).
Hope I'm making any sense here.

[mwcpa]

"If I do the married filing separate and pay less, could that in any way endanger the uncommingled status of my father's money?"

actually, this would establish more that yours is yours and his is his....

but, as noted by others "You should speak with a divorce attorney"...

[mwcpa]

"But 555 states when MFS I have to take both half his income, and half his deductions (probably standard in this case). "
where do you live?

[mowiss]

WI til September, now DE

[mowiss]

(he now lives in TX, if that matters)

[mwcpa]

you and he live in community property states.....
that adds a wrinkle to married filing separate.....

from the publication you referenced
"In Idaho, Louisiana, Texas, and Wisconsin, income from most separate property is community income. "

as such

"Wages, earnings, and profits. A spouse's (or RDP's/California same-sex spouse's) wages, earnings, and net profits from a sole proprietorship are community income and must be evenly split. "

but there are special rules....

"Spouses living apart all year. If you are married at any time during the calendar year, special rules apply for reporting certain community income. You must meet all the following conditions for these special rules to apply.

You and your spouse lived apart all year.
You and your spouse did not file a joint return for a tax year beginning or ending in the calendar year.
You and/or your spouse had earned income for the calendar year that is community income.
You and your spouse have not transferred, directly or indirectly, any of the earned income in condition (3) above between yourselves before the end of the year. Do not take into account transfers satisfying child support obligations or transfers of very small amounts or value. "

You should see a local qualified tax professional, look for an EA, CPA (who provides tax services) or tax attorney.

[mowiss]

EA? Estate attorney..?

[mwcpa]

EA is an "enrolled agent".... someone who has gone through a rigorous level of testing and is required to attend continuing education classes.... it is a special designation given by the IRS....

stay away from unregistered "preparer" types (the ones who do not sign the return they prepare, suggest things that are not legal, advertise how big of a refund they can get you - while failing to offer advise on how to better manage taxes, etc.). Here is some data from IRS when evaluating the proper tax professional ... www.irs.gov/newsroom/article/0,,id=251962,00.html

[mowiss]

Thanks, everyone

[rangerj]

Added note. Ditto the above, see a tax professional, such as an "Enrolled Agent or CPA, in conjunction with a divorce attorney. Do not assume a divorce attorney knows taxes. Very rarely, 1/1000 would I advise a Married Filing Joint (MFJ) tax return in a divorce situation. When you file a joint return both persons are severally and jointly liable for all taxes on the return, or discovered at a later date. Filing as "married filing separate" (MFS) saves (protects) you from this possibility. You and the ex can agree on a sharing of a refund without filing an MFJ return. Food for thought.

[mowiss]

"Added note. Ditto the above, see a tax professional, such as an "Enrolled Agent or CPA, in conjunction with a divorce attorney. Do not assume a divorce attorney knows taxes."
I don't & wouldn't; but at least my estate attorney did seem to know quite a bit. But, he's in WI. And I'm having trouble finding anyone under "Financial" in the yellow pages here that even has a CPA (or any other respectable-looking letters) listed after the name. (The one - yes, one.. - that I did find doesn't even answer the phone, mechanically or otherwise.) Ah probably just senility setting in that I can't think of another way to search. But anyway I was thinking maybe it'd just be better to find a good divorce atty first, then ask them for a referral in re the taxes. A new problem Then emerges: How to find a good atty when so new to the area? Just ask strangers & then start conducting some interviews? But I realize that's beyond the scope of this group.
"Very rarely, 1/1000 would I advise a Married Filing Joint (MFJ) tax return in a divorce situation. When you file a joint return both persons are severally and jointly liable for all taxes on the return, or discovered at a later date. Filing as "married filing separate" (MFS) saves (protects) you from this possibility. You and the ex can agree on a sharing of a refund without filing an MFJ return. "
Hmm, "injured spouse" or somesuch comes to mind here. Besides the fact that any refund would go to him (I pay no taxes), I guess I've always taken that risk when it came to taxes since we've always filed jointly over the last 20 years, if you take my point.
Having said that, I feel I owe further explanation after Petunia posted, in that I could be duped into having assets comminged. What I've been doing the past few years since my father's estate was settled, was having STBX do the taxes once as normal (status MFJ); then doing them over again as if I'd never inherited anything, then paying him the diff. While I may have always paid more than needed, I sure did CMA though, didn't I.... The situation this year is similar in that he believes he could've gotten the EIC w/o my assets being called into question. And what he said rang true. That's why the furious contrast between the two filing status scenarios.

[mowiss]

"I pay no taxes" was actually supposed to be "I had no withholding"