Typically, filing taxes when you're married is fairly straightforward. One major complication that surprises new spouses, though, occurs for those who marry in community property states. These states carry special rules for married couples, which dictate that any property owned prior to the nuptials are owned by the respective man and woman; anything obtained by the couple after the ceremony is jointly owned between husband and wife.
If, for instance, newlyweds purchase a new house, this property is equally owned by both (otherwise considered "the community"). On the other hand, if the house was owned by the woman prior to the wedding, she is the sole possessor. As of 2014, there are 9 community property states: Texas, New Mexico, Arizona, California, Washington, Idaho, Nevada, Wisconsin and Louisiana. Each state varies slightly in its interpretation of the law, but generally, any assets picked up following a marriage are equally owned by the couple.
Equally Sharing Taxes
Filing a joint return in a community property state is like any other state, as the outcome of the filing isn't affected by the state-specific laws. Those married couples who decide to file separately, however, are in for a rough time. A spouse's income must be claimed in addition to half the partner's income.
If a man makes minimum wage and his wife is the CEO of a corporation, he must claim half of her earnings. Regardless of the income gap, a wife and husband's salaries are considered community property. In certain states, specifically Washington, California and Nevada, same-sex married couples are subject to similar complications with federal tax returns. Even though they have to file separately, they must still report half of their partner's income on the returns.
Problems and Resolutions
Couples who decide "‘til death do us part" isn't an option may find separating their property and tax responsibilities difficult and frustrating. Given the rules around joint ownership in community property states, dividing houses and vehicles can quickly become complicated. Taxes are even more of an issue for those couples who don't heed their state's guidelines on proper filing.
In many cases, a freshly divorced couple can find themselves receiving letters from the IRS after failing to correctly file their taxes. A licensed tax professional is often useful when trying to calculate a return or, more importantly, if the IRS alerts you to a problem. Enlisting a tax resolution company will be preferable to continuous issues with the IRS over your return and what's considered community property.