In most circumstances, married taxpayers are required to file a joint tax return because of the many advantages for doing so. However, joint filing means both taxpayers are equally liable for the taxes due, along with any interest or penalties that may arise later. This liability remains even if the couple later files for divorce. In situations where one of the spouses earned all or the majority of the income, the other spouse may require tax assistance. If you find yourself in a similar situation, here’s how you can obtain innocent spouse relief through the IRS.

Relief Classifications and Requirements

You can potentially receive three primary types of tax liability relief:

Innocent Spouse Relief

Innocent spouse relief absolves you of liability for any additional taxes you may owe if your spouse or former spouse failed to report income, reported income inaccurately, or claimed incorrect deductions.

To qualify for innocent spouse relief, you must:

  • Have filed a joint return with an understatement of tax that’s solely your spouse’s error
  • Establish that at the time of signing your joint return, you were ignorant of the error

Fortunately, the IRS accounts for the context, facts, and your circumstances to decide whether it would be unfair to hold you liable for any erroneous understatements.

Separation of Liability Relief

If you’re legally separated from your spouse, you can obtain separation of liability relief that provides a separate allocation for any additional taxes owed because of misreporting. Once the issue is settled, you are liable for the amount allocated to you. To qualify, you must meet one of these three requirements:

  • You’re legally separated or divorced from the spouse with whom you filed the joint tax return
  • You’re widowed
  • You haven’t been a member of the same household as your former spouse at any time during the 12 months ending on the date you request relief

Equitable Relief

If you’re unable to qualify for innocent spouse relief or separation of liability relief, you still may be able to qualify for equitable relief. To do so, you must:

  • Be ineligible for innocent spouse relief or separation of liability relief
  • Have filed a joint return for the tax year or years in question
  • Have filed a claim for relief in due time
  • Not have transferred assets between you and your spouse as part of a fraudulent scheme
  • Not have knowingly participated in filing a fraudulent joint return
  • Show the tax liability from which you’re seeking relief is your spouse’s fault

If you meet these conditions, the IRS may grant relief if you’re able to prove that it would be unfair to hold you liable for any understated or unpaid taxes.

GJR Consulting Is Here to Help

If you find yourself with a tax liability that’s the fault of your spouse or former spouse, GJR Consulting is here to help you navigate your options and minimize your burden. Contact our team today and we’ll start exploring your options so you can get on with your life sooner than you thought possible.

If you’ve encountered problems with tracking and submitting payroll taxes in the past, you already know the penalties can be particularly tough on businesses. As an employer, you’re obligated to pay a number taxes for each of your employees. These taxes are deducted from the employees’ paychecks and held in your trust until you pay the taxes.

Ensuring you’re tracking these taxes so you can pay them accurately and on time is a critical part of your business’s success. These taxes include:

  • State income tax
  • Federal income tax (FICA)
  • Social Security tax matching (SSI)
  • Medicare tax matching
  • State and federal unemployment tax
  • Workers’ compensation tax

Staying on top of these payroll taxes can quickly turn into a full-time job. These are some of the most common problems you should be aware of when managing payroll taxes.

Miscalculating the Amount Due From Employees

Employers can sometimes miscalculate the amount of taxes due from employees. When this happens, you either end up with an amount that’s higher or lower than what’s actually owed. When you take out too much from employees’ paychecks, it’s called overwithholding. When you don’t take out enough, it’s called underwithholding. Oftentimes, the mistake isn’t realized until it’s too late, making it much more difficult to spot without active measures in place.

If you withhold too much, you need to refund the employee in full or withhold less from future paychecks until you’ve corrected the problem. If you withhold too little, you need to withhold more money from future paychecks until you’ve withheld enough to fix the issue.

Miscalculating Matching Contributions

Another common payroll tax problem is miscalculating matching contributions. When matching contributions, it’s critical to ensure you’re matching the correct amount for each paycheck. In the event that you miscalculate matching contributions, you can rectify the mistake by following steps similar to those above.

Misclassifying Employees

Employers also encounter potential payroll tax issues when they incorrectly classify employee status. This can happen when full-time employees are misclassified as independent contractors or when exempt employees are classified as non-exempt and vice versa. Make sure you clarify the classification requirements for independent contractors versus full-time employees, so you don’t make the mistake of paying taxes for the wrong classification. Even if the misclassification is unintentional, expect to pay steep penalties. If misclassifications are found to be intentional, you could face criminal charges.

We’re Here to Help

Have you encountered any of these problems in the past? At GJR Consulting, we’ve already helped hundreds of businesses identify and solve payroll issues, and we’re ready to help your organization find the right payroll tax filing solution. Get in contact with our team today, and we’ll get started immediately.