Anaya Nolan
Whether a couple is considered married for tax purposes depends on state law. Common-law marriages are recognized for federal income tax purposes if they are recognized by the state in which the couple resides. If a couple is recognized as common-law married by their state, they can file a joint tax return. Filing a joint tax return can have a significant impact on the tax credits and deductions that a couple qualifies for.
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What You'll Learn
Common-law marriage recognition
Common-law marriages are recognised differently across various states. For instance, in Texas, one way to be in a common-law marriage is by signing a document and submitting it. Another way is to hold yourself out as married, and filing a joint tax return would fulfil this element.
If a state recognises common-law marriages, then taxpayers with a common-law marriage are considered married for tax purposes, even if they later move to a state that does not recognise common-law marriage. For example, Georgia, Idaho, New Hampshire, and Ohio are some states that permit certain common-law marriages.
According to the Internal Revenue Code of 1954, a taxpayer who enters into a common-law marriage in a state that recognises such marriages is entitled to an exemption for their common-law wife when making a separate income tax return, provided that she has no gross income and is not the dependent of another taxpayer. Additionally, for the purpose of filing a joint income tax return, a common-law wife in such a state will be considered to be the taxpayer's spouse.
It is important to note that there are risks associated with filing jointly as a common-law married couple. Once a couple holds themselves out as married, they are considered married, and in the event of a separation, they will need to go through a divorce like any other married couple. Additionally, when filing jointly, the tax liability becomes "joint and several", meaning each spouse is responsible for the taxes in full.
To make an informed decision, it is recommended to prepare the tax return both ways, jointly and separately, and compare the net refund or balance due from each method. Couples can also use tax calculators to estimate their tax liability and determine the most advantageous filing status.
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Joint tax return requirements
A joint tax return, also known as married filing jointly, is a tax return filed with the Internal Revenue Service (IRS) by two married taxpayers. It allows married couples to combine their tax liability and report their income, deductions, and credits on the same joint return. This option often provides a bigger tax refund or a lower tax liability. However, this is not always the case, and it is recommended that couples investigate their options by calculating their refund or balance due under different filing options.
To be eligible for married filing jointly status, taxpayers must be legally married to each other on or before the last day of the tax year, and both must agree to file and sign the joint return. In the case of common-law marriages, which are recognized in some states, filing a joint tax return can be used as evidence of marriage. However, it is important to note that once a couple holds themselves out as married, they are considered married for all purposes, including tax filings, and will need to go through a divorce if they separate.
When filing jointly, both spouses are equally responsible for the return and the taxes. This means that if one spouse understates the taxes due, both are equally liable for any penalties, unless the other spouse can prove they were unaware of the mistake and did not benefit from it. Therefore, it is important for couples to carefully consider their options and consult with a tax professional before choosing to file jointly or separately.
In addition to married filing jointly, there are other filing statuses that taxpayers may qualify for, such as Qualifying Widow or Widower (QW) for those who have recently lost a spouse. This status provides similar tax advantages to married filing jointly. Nonresident aliens generally cannot file as married filing jointly if either spouse was a nonresident alien during the tax year.
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Tax benefits and drawbacks
Filing jointly as a common-law married couple has its benefits and drawbacks. Firstly, it is important to note that common-law marriages are recognized for federal income tax purposes only if they are recognized by the state in which the couple resides. If a couple begins their relationship in a state that does not recognize common-law marriages, they will not be considered married for federal income tax purposes, even if they later move to a state that does recognize such marriages.
One benefit of filing jointly is the increased standard deduction. In 2024, married couples filing jointly can claim a standard deduction of $29,200, compared to $14,600 for those filing separately. This increases to $30,000 for joint filers and $15,000 for separate filers in 2025. Joint filers also have higher income thresholds for certain taxes and deductions, allowing them to qualify for more tax breaks. Additionally, filing jointly can simplify the tax filing process and reduce the risk of audit.
However, there are also potential drawbacks to filing jointly. One important consideration is that once a couple files a joint tax return, they are considered legally married and would need to go through a divorce if they decide to separate. This can create additional complexities and financial obligations in the event of a breakup. Another drawback is the potential for higher tax rates when filing jointly, especially if one spouse has a significantly higher income. In some cases, filing separately may allow for more tax savings, particularly if there are significant medical expenses or other deductions that can only be claimed on a separate return.
To make an informed decision, it is recommended to prepare the tax return both ways (jointly and separately) and compare the net refund or balance due for each method. Online tax tools can also be utilized to calculate and recommend the filing status that provides the greatest tax savings for your specific situation.
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Divorce and remarriage implications
The implications of divorce and remarriage can vary depending on several factors, including the laws of the specific state or country, the specifics of the previous and new marriages, and the financial and familial circumstances involved.
In the context of common-law marriage, it is important to note that while the process of establishing such a union may differ from traditional marriages, the divorce procedure closely resembles that of a conventional marriage. Before initiating a common-law divorce, the couple must first validate their common-law marriage in a court of law, providing evidence of cohabitation, intention to live as a married couple, and public presentation as such.
Upon filing for divorce, both common-law and traditional marriages face similar considerations, including property division, alimony or spousal support, child custody, and child support. These factors can also be influenced by remarriage. For instance, remarriage can lead to changes in spousal support obligations, depending on local laws and the original settlement agreement. Child support obligations typically remain with the biological or adoptive parents, but a court may reassess these arrangements if the financial situation changes significantly due to remarriage.
Additionally, remarriage often involves the combination of assets, such as real estate, businesses, or investment portfolios. Prenuptial agreements are commonly used in these cases to outline expectations regarding spousal support, property division, and inheritance rights. Estate planning is also crucial, as wills and trusts may need updates to reflect the new marital and family dynamics.
It is worth noting that in the context of common-law marriage, some sources suggest that there is no such concept as common-law divorce. Once a couple holds themselves out as married, they are considered married for all purposes. As a result, they would need to undergo the divorce process with all the associated legal implications, just like any other married couple.
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State-specific considerations
If a couple resides in a state that recognizes common-law marriages, they are considered married for federal income tax purposes. This means that they are entitled to file joint income tax returns and claim the associated benefits, such as increased standard deductions and tax breaks. Filing a joint tax return can also be used as evidence of their marriage. However, it's important to note that once a couple holds themselves out as married, they are legally married, and in the event of a separation, they will need to go through the divorce process.
On the other hand, if a couple begins their relationship in a state that does not recognize common-law marriages, they will not be considered married for federal income tax purposes, even if they later move to a state that does recognize such marriages. This highlights the significance of understanding the specific laws and requirements of the state in which the couple resides.
While filing jointly as a common-law married couple can provide tax benefits, there are also risks to consider. One important consideration is that, in the case of a separation, there is no concept of common-law divorce. This means that the couple would need to go through the same divorce process as any other married couple, which can be complex and costly. Additionally, when filing jointly, each spouse becomes individually responsible for the taxes in full, which can have significant financial implications.
To make an informed decision about filing jointly or separately, it is recommended to prepare tax returns both ways and consult a qualified tax professional or attorney to understand the specific laws and considerations of the state in which the couple resides.
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Frequently asked questions
Common-law marriage is a marriage that is considered valid without a marriage certificate or license being present. Common-law marriage is recognized in certain states, including Georgia (if the requirements were fulfilled before 1 January 1997), Idaho (if the requirements were fulfilled before 1 January 1996), New Hampshire (for inheritance only), and Ohio (if the requirements were fulfilled before 10 October 1991).
If you are considered common-law married in the state that you reside in, you are entitled to file taxes jointly as a married couple.
Filing a joint tax return as a common-law married couple can create a chicken and egg problem if you are audited. Additionally, once you file jointly, you are both responsible for taxes in full, and if you separate, you will need to go through a divorce.
Married couples who file jointly typically have access to a bigger standard deduction, reducing their taxable income. Additionally, filing jointly usually means you can qualify for certain tax breaks, like IRA contributions and education credits.
