Keith Mack
Common-law marriage has been recognized in the United States since the 1870s, and it continues to be practiced in several states. The IRS treats common-law marriages on par with legal marriages for tax purposes, provided the state where the couple resides recognizes their union. Common-law partners can benefit from tax deductions, employer benefits, and estate planning advantages by filing joint tax returns. However, it is crucial to be consistent and truthful in tax filings, and separation or divorce in a common-law marriage can be complex. Consulting a tax professional or family lawyer is advisable to navigate the specific state laws and ensure accurate tax compliance.
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What You'll Learn
Check if your state recognizes common-law marriage
Whether or not your state recognizes common-law marriage is important because the IRS follows state laws to determine your marital status for tax purposes. If your state recognizes your common-law marriage, the IRS will also consider you married for tax purposes.
As of 2022, the following states recognize common-law marriage:
- Colorado
- Iowa
- Kansas
- Montana
- Rhode Island
- Oklahoma
- Texas
- Utah
- New Hampshire (for limited purposes)
- District of Columbia
Three other states recognize domestic common-law marriage after the fact for limited purposes:
- South Carolina
- Utah
- New Hampshire
Some states have specific requirements for common-law marriages to be recognized. For example, in Texas, both parties in an informal marriage must consent to be married, live together, and tell others they are married. In Montana, the parties must have the legal capacity to marry each other, share mutual consent and agreement to be married, and validate their union by living together while maintaining a reputation in public as husband and wife. There is no stipulated duration of cohabitation in Montana. In Iowa, couples must mutually consent to being married, live together consistently, and publicly declare their marital bond.
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Understand the risks of filing jointly
If you are recognised as common-law married by your state, you can file as married filing jointly (MFJ). However, this is only a problem for states that do not recognise common-law marriages. For instance, New Hampshire only recognises common-law marriage for inheritance purposes when the "spouse" has died.
One way to be in a common-law marriage is by signing a document and submitting it. Another way is by holding yourself out as married. Filing a joint tax return would fulfil the latter element. If you are recognised as common-law married, you must file your tax return jointly. Otherwise, you can be held accountable for fraudulent tax returns.
When you file a joint tax return, your tax liability becomes "joint and several", meaning that you are each responsible for the taxes in full. While common-law marriage exists, there is no such thing as common-law divorce. Therefore, if you decide to separate, you will need to get divorced with all the property and support obligations that entails.
If you are a common-law partner, you may be eligible for the same legal benefits that married couples get. For example, common-law partners can use employer benefits for their spouses. By filing a joint tax return, common-law partners can receive unlimited marital exemptions from estate planning.
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Consult a tax professional or lawyer
If you're uncertain about your marital status and how it affects your taxes, it's best to consult a tax professional or lawyer. They can provide comprehensive advice tailored to your specific situation. While online resources can offer general guidance, they cannot replace the expertise of a qualified professional.
Tax professionals and lawyers stay up-to-date with the latest tax laws and regulations, including those related to common-law marriages. They can help you understand the tax implications of your marital status and guide you through the filing process. This is especially important as the tax treatment of common-law marriages can vary depending on your state. For example, Texas recognizes common-law marriages for tax purposes, while Pennsylvania does not.
By consulting a tax professional or lawyer, you can ensure that you're complying with the tax laws specific to your state. They can help you navigate the complexities of filing jointly or separately, and advise you on the tax benefits and deductions you may be eligible for as a common-law married couple. This includes understanding how your annual income tax returns may change and how you can take advantage of benefits such as employer-provided health insurance coverage for your spouse.
Additionally, a tax professional or lawyer can help you address any back taxes that you or your partner may owe from before your common-law marriage. They can also provide guidance on estate planning and inheritance laws, which are particularly relevant for common-law couples.
Remember, the information provided by a qualified tax professional or lawyer will be specific to your unique circumstances, ensuring that you're compliant with the law and optimizing your tax filings as a common-law married couple.
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File a joint tax return to access employer benefits
If you are recognised as common-law married in your state, you can file your taxes as married filing jointly (MFJ). This is only an issue for states that do not recognise common-law marriages. In the US, the Internal Revenue Service (IRS) follows the laws of your state to determine your marital status for tax purposes.
Filing a joint tax return offers several benefits. Firstly, it allows both spouses to combine their tax liability and report their income, deductions, and credits on the same joint return. This often results in a lower overall tax bill compared to filing two separate returns. Couples who file jointly may also qualify for multiple tax credits, such as the American Opportunity Credit, the Lifetime Learning Credit, and deductions for student loan interest, tuition, and fees. Additionally, filing jointly can provide a bigger tax refund, especially when one spouse earns most of the income.
However, it is important to note that filing jointly also has potential drawbacks. Both spouses are equally responsible for the return and any taxes and penalties owed. If either spouse understates the taxes due, both are liable for penalties unless the other spouse can prove they were unaware of the mistake. Additionally, married couples may face a "marriage penalty," where their dual income pushes them into a higher tax bracket than if they had filed separately.
When deciding whether to file jointly or separately, it is recommended to consult with a tax professional or family lawyer. They can help you understand your specific situation and determine the most advantageous filing status for you.
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Be consistent and truthful on your federal income tax returns
If you are recognised as common-law married in your state, you can file as married for federal income tax returns. However, it is important to be consistent and truthful in your filings.
Firstly, you must be certain of your marital status. If you are unsure, check with a tax professional or family lawyer. If you are recognised as common-law married in your state, you must file as married for your federal income tax returns. You cannot choose to file as single in some years and married in others. If you are not recognised as common-law married in your state, you must file as single.
Secondly, if you are recognised as common-law married in your state, you must file as married until you are legally divorced. If you separate, you will need to go through a divorce like any other married couple.
Thirdly, if you are recognised as common-law married, you are eligible for the same legal benefits as married couples. These include tax deductions, such as a mortgage interest deduction if you own a house together. You can also receive one another's social security benefits and employer benefits, such as health insurance.
Finally, if you are recognised as common-law married, you must file as married on your federal income tax returns. If you do not, you may be held accountable for fraudulent tax returns. The IRS will likely find out about any inaccurate tax returns, and there may be severe consequences.
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Frequently asked questions
Common-law marriage is a marriage that is considered valid without a marriage license or marriage certificate. Common-law marriage has been practiced in the United States since the 1870s. A common-law marriage is typically defined as a couple that lives together for a certain period, presents themselves as a married couple to their community, and intends to be in a long-term committed relationship.
The requirements for a common-law marriage vary by state. You must meet your state's definition of a common-law couple to be considered married. Some states, like Texas, recognize common-law marriage, while others, like Pennsylvania, do not.
Common-law partners can receive the same tax benefits as legally married couples, including various tax deductions such as a mortgage interest deduction. Common-law couples can also take advantage of estate planning benefits and employer benefits for their spouses, such as health insurance coverage.
Yes, there are risks associated with filing taxes jointly as a common-law married couple. When you file a joint tax return, your tax liability becomes "joint and several," meaning each partner is responsible for the taxes in full. Additionally, if you separate, you will need to go through a divorce like any other married couple, as there is no such thing as common-law divorce.
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