souldoubt
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Post by souldoubt on Aug 8, 2014 11:33:01 GMT -5
I can't imagine getting divorced for a tax break. Some of the examples I've read in this thread are gaming the system. Not sure how it's any different than some of the other threads on here talking about people who abuse welfare, unemployment, student loans, etc where most seem to be against it. If someone really needs financial assistance or doesn't want to go broke while their spouse has expensive care that's one thing (if someone worked and paid taxes for 40+ years the government can pick up that tab in their later years) but the rest just wouldn't sit well with me. That said that's what happens when we have a tax system and social programs that are set up that basically encourage and reward that type of thinking.
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cktc
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Post by cktc on Aug 8, 2014 11:57:04 GMT -5
If it’s a question of health/quality of life, and being able to provide for the children, I could understand sacrificing the marriage. If it is strictly financial, just to save a few thousand dollars on taxes, protect some extraneous assets, etc…, then I think it would set a terrible precedent and jeopardize the level of commitment.
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Deleted
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Post by Deleted on Aug 8, 2014 12:01:18 GMT -5
I can't imagine getting divorced for a tax break. Some of the examples I've read in this thread are gaming the system. Not sure how it's any different than some of the other threads on here talking about people who abuse welfare, unemployment, student loans, etc where most seem to be against it. If someone really needs financial assistance or doesn't want to go broke while their spouse has expensive care that's one thing (if someone worked and paid taxes for 40+ years the government can pick up that tab in their later years) but the rest just wouldn't sit well with me. That said that's what happens when we have a tax system and social programs that are set up that basically encourage and reward that type of thinking. I don't consider it gaming the system if you change your behavior to get different tax consequences. If I itemize deductions, I can pay less taxes if I declare all my charitable deductions. Is that gaming the system? If I'm not married, I pay different taxes than if I'm married. Even the IRS has conceded that divorcing to reduce tax liability is not fraud. (Divorcing before year-end then remarrying in January, year after year, IS tax fraud and they've cracked down on that.)
If DH and I divorced, he would not be applying for food stamps or other need-based programs.
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souldoubt
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Post by souldoubt on Aug 8, 2014 12:20:39 GMT -5
There's no changing of behavior being discussed unless you consider what box you check at tax time as far as filing status. The only thing being talked about is legally getting a divorce to save money while nothing else changes - still living together, still splitting costs or going by whatever system you had in place with your now ex before getting a divorce and so on. Trying to compare itemizing your deductions to this is beyond reaching. We aren't even talking about switching between MFJ and MFS it's a full on divorce to reduce taxes which ultimately taxpayers pick up the tab for. Of course the IRS won't say it's fraud because the system we have set up which requires a 300+ page document each year for individual filers alone allows it. I'm not interested in finding ways I can pay more money in taxes but I would never fathom getting a divorce for many of the reasons discussed. To each his or her own.
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raeoflyte
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Post by raeoflyte on Aug 8, 2014 12:33:26 GMT -5
There's no changing of behavior being discussed unless you consider what box you check at tax time as far as filing status. The only thing being talked about is legally getting a divorce to save money while nothing else changes - still living together, still splitting costs or going by whatever system you had in place with your now ex before getting a divorce and so on. Trying to compare itemizing your deductions to this is beyond reaching. We aren't even talking about switching between MFJ and MFS it's a full on divorce to reduce taxes which ultimately taxpayers pick up the tab for. Of course the IRS won't say it's fraud because the system we have set up which requires a 300+ page document each year for individual filers alone allows it. I'm not interested in finding ways I can pay more money in taxes but I would never fathom getting a divorce for many of the reasons discussed. To each his or her own. Are people who never get married equally defrauding the system? I don't think anyone is talking about making changes for a few thousand dollars. The amount you'd pay a lawyer to get medical authority would make that savings a wash. Sent from my ADR6410LVW using proboards
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souldoubt
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Post by souldoubt on Aug 8, 2014 12:43:22 GMT -5
Has nothing to do with the question of would you get divorced for tax reasons. If people choose to never get married in the first place then they weren't getting any of the benefits married couples receive - health benefits, MFJ tax tables, SS benefits of a partner who passes and so on. Most of the cases being discussed are probably of people who when they got married didn't make much, have many assets or have successful businesses. They get the tax breaks and benefits afforded to married couples and now the question is of them getting divorced because it would be a more beneficial tax filing status because of what they make or own.
Here's a question - if two people with kid(s) get divorced and one of the individuals makes very little, claims the children and gets EITC and any other available tax credits is that fine? Because the system allows just like legally getting divorced to file as a single individual it's a question of ethics and what you're comfortable with. We can discuss it all day long but we aren't going to change each others minds.
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raeoflyte
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Post by raeoflyte on Aug 8, 2014 12:47:26 GMT -5
Has nothing to do with the question of would you get divorced for tax reasons. If people choose to never get married in the first place then they weren't getting any of the benefits married couples receive - health benefits, MFJ tax tables, SS benefits of a partner who passes and so on. Most of the cases being discussed are probably of people who when they got married didn't make much, have many assets or have successful businesses. They get the tax breaks and benefits afforded to married couples and now the question is of them getting divorced because it would be a more beneficial tax filing status because of what they make or own. Here's a question - if two people with kid(s) get divorced and one of the individuals makes very little, claims the children and gets EITC and any other available tax credits is that fine? Because the system allows just like legally getting divorced to file as a single individual it's a question of ethics and what you're comfortable with. We can discuss it all day long but we aren't going to change each others minds. Claiming hoh and maxing eitc when you don't provide 51% of the household income (which is the case you're describing) is fraud. Sent from my ADR6410LVW using proboards
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NoNamePerson
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Post by NoNamePerson on Aug 8, 2014 12:51:34 GMT -5
Why not? Some people stay married for financial advantage
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souldoubt
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Post by souldoubt on Aug 8, 2014 12:53:55 GMT -5
You can claim the EITC filing as statuses other than HOH. If you aren't married you can claim that you're renting rooms and I doubt the IRS is going to tell someone they don't qualify because they're renting rooms that aren't covering 51% of the total mortgage expense. I was raised by a single parent who claimed HOH while we rented rooms growing up.
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raeoflyte
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Post by raeoflyte on Aug 8, 2014 13:20:36 GMT -5
Yes, but you're still talking about fraud if you "say" you're renting a room when you're actually living your life together and the higher wage earner is covering most of the expenses. If I am legitimately renting a room, my landlords income doesn't count in my 51% calculation.
I havent gotten any of the benefits you list for marriage, and I got married basically to game the system. Not sure if that means I should divorce or not.
Sent from my ADR6410LVW using proboards
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souldoubt
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Post by souldoubt on Aug 8, 2014 13:44:21 GMT -5
That's incorrect. To qualify for the EITC aside from AGI limits, being between the ages of 25-65 and some other requirements as long as someone else doesn't claim you as a dependent you can qualify. Two people living together but not married for tax purposes can qualify for the EITC and if they have a child together whoever claims the kid can have an AGI of 37K and still qualify. The limit for a single individual with no kids is extremely low but it's still possible.
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Firebird
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Post by Firebird on Aug 8, 2014 13:46:37 GMT -5
I got married basically to game the system. Not sure if that means I should divorce or not.
That's an interesting point... I know several couples who would have stayed unmarried "but for" the financial advantages (in other words, "gaming the system," if you want to call it that, was their only incentive for marrying). It seems fairly common these days, especially in our generation.
Logically, couples who would have stayed married "but for" the financial advantages are doing the same thing in reverse. So if one is "acceptable" then the other should be also.
Food for thought.
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raeoflyte
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Post by raeoflyte on Aug 8, 2014 13:48:58 GMT -5
That's incorrect. To qualify for the EITC aside from AGI limits, being between the ages of 25-65 and some other requirements as long as someone else doesn't claim you as a dependent you can qualify. Two people living together but not married for tax purposes can qualify for the EITC and if they have a child together whoever claims the kid can have an AGI of 37K and still qualify. The limit for a single individual with no kids is extremely low but it's still possible. Damn-that is exactly dh and I's situation if we weren't married... You're going to make me regret getting that stupid licence. Sent from my ADR6410LVW using proboards
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Peace Of Mind
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Post by Peace Of Mind on Aug 8, 2014 13:53:33 GMT -5
Why not? Some people stay married for financial advantage Why else would I allow a man to live in my house and make messes? To answer the OP - I'm not sure but maybe I would consider doing it as an excuse so his feelings wouldn't be hurt. It's so one of us doesn't get bankrupt. Sounds plausible to me!
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Sum Dum Gai
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Post by Sum Dum Gai on Aug 8, 2014 18:08:06 GMT -5
We created a screwed up system that rewards certain behaviors, even if they aren't, strictly speaking, beneficial to society. We can't really get mad when people modify their behavior to maximize their financial rewards within that system.
Loop and I only got married in the first place because I was joining the military and they provide extra pay and benefits if you're married. We would have been committed to each other for life either way, but honestly don't need a piece of paper from the state to define our relationship. In our case the financial reward for getting one was pretty high, so we did it. If the financial reward for getting rid of it got high enough we'd probably do that too. Has nothing to do with our actual relationship. It's just a piece of paper with a state seal on it. It doesn't define us, our feelings about each other, or affect how we live our lives.
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Virgil Showlion
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Post by Virgil Showlion on Aug 8, 2014 20:11:14 GMT -5
If I ever proposed something that crazy, my wife would divorce me.
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