This year there were a few cases and IRS rulings where a married couple tried to change their filing status. Two of the cases involved a couple who split up at year end (before the time to file that year’s return). The cases are a reminder of the rule on when a married couple may amend a return to change from MFS to MFJ (before the statute of limitations runs out) and from MFJ to MFS (before April 15).
Also, in 2014, a few states that did not recognized same-sex marriage now due because of litigation challenging state law (such as Virginia and Wisconsin).
We probably think that identifying your filing status for your income tax return is one of the easiest things to do. These cases show that there can be challenges.
On December 10, Congressman Camp, soon to retire from Congress, officially introduced his Tax Reform Act of 2014 which has been out as a draft since February 2014, as H.R. 1. That is the bill Congressman Boehner held open for tax reform. Camp’s proposal resolves one challenging filing status question – is someone entitled to use the favorable head-of-household status? Under his proposal, the question goes away as he’d repeal that filing status!
What do you think about filing status and tax reform?
Original Post By: Annette Nellen
Annette Nellen, CPA, Esq., is a professor in and director of San Jose State University’s graduate tax program (MST), teaching courses in tax research, accounting methods, property transactions, state taxation, employment tax, ethics, tax policy, tax reform, and high technology tax issues.
Annette is the immediate past chair of the AICPA Individual Taxation Technical Resource Panel and a current member of the Executive Committee of the Tax Section of the California Bar. Annette is a regular contributor to the AICPA Tax Insider and Corporate Taxation Insider e-newsletters. She is the author of BNA Portfolio #533, Amortization of Intangibles.
Annette has testified before the House Ways & Means Committee, Senate Finance Committee, California Assembly Revenue & Taxation Committee, and tax reform commissions and committees on various aspects of federal and state tax reform.
Prior to joining SJSU, Annette was with Ernst & Young and the IRS.
1 comment on “Filing Status Challenges And Developments”
Head of Household is very useful but is misunderstood. I do not see a reason to eliminate it.
The solution to the MFJ dilema is there should be a clear disclaimer on the tax return (where the taxpayers much each separately sign) stating they will be jointly and severally liable for the entire balance of the tax, including increases due to audits.
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