Janitor Bob Posted March 13, 2014 Report Share Posted March 13, 2014 repeat client comes to me every year with the same situation...I don't think there is any way to help her, but though I'd explain it here to see if any of you know something I don't: Client and husband are married...have been for many years...although I'm not sure why. He keeps all of his finances separate and secret....He owns the home and pays the property taxes, utilities, etc and gives her an occasional allowance. She works a low-paying part time job and does some Sch C 1099-MISc work on the side. Every year, he files MFS and itemizes deductions. So every year, she has to file the same way...and every years owes in a LOT....In her words, its his way of keeping her down. Is there anything she can do in this case.....It would not be so bad if she did not need to itemize...she would even have a small refund.....but since he itemizes she must as well...and she has only state and local taxes withheld as a deduction. any options for her other than divorce? Quote Link to comment Share on other sites More sharing options...
JMovichEA Posted March 13, 2014 Report Share Posted March 13, 2014 Poison might work 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 Poison or you start dating her. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 13, 2014 Report Share Posted March 13, 2014 She chooses to stay in the situation. No help available for her. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 13, 2014 Report Share Posted March 13, 2014 The only thing I can think of is whether or not he really is itemizing, and how will she know when he isn't? At some point the mortgage may be paid off, and then will the real estate taxes, other taxes and other deductions continue to be enough for him to itemize? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 The only thing I can think of is whether or not he really is itemizing, and how will she know when he isn't? At some point the mortgage may be paid off, and then will the real estate taxes, other taxes and other deductions continue to be enough for him to itemize? Yes, the mortgage might be for only 30 years. Who knows she might be lucky and only 20 years left. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted March 13, 2014 Report Share Posted March 13, 2014 Maybe she should file first, as soon as she receives her W-2 and 1099 and take standard deduction. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted March 13, 2014 Report Share Posted March 13, 2014 repeat client comes to me every year with the same situation...I don't think there is any way to help her, but though I'd explain it here to see if any of you know something I don't: Client and husband are married...have been for many years...although I'm not sure why. He keeps all of his finances separate and secret....He owns the home and pays the property taxes, utilities, etc and gives her an occasional allowance. She works a low-paying part time job and does some Sch C 1099-MISc work on the side. Every year, he files MFS and itemizes deductions. So every year, she has to file the same way...and every years owes in a LOT....In her words, its his way of keeping her down. Is there anything she can do in this case.....It would not be so bad if she did not need to itemize...she would even have a small refund.....but since he itemizes she must as well...and she has only state and local taxes withheld as a deduction. any options for her other than divorce? Have her file before him....using the standard deduction . Then he'll have to file the same way. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 13, 2014 Report Share Posted March 13, 2014 Yes, the mortgage might be for only 30 years. Who knows she might be lucky and only 20 years left. Yeah, I know, I know, but with everything being a secret, how will she ever know if he stops itemizing? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 Maybe she should file first, as soon as she receives her W-2 and 1099 and take standard deduction. Yes and then the IRS will audit her. It is not who files first: The rule is that if your spouse itemizes, you have to itemize. 3 Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 Yes and then the IRS will audit her. It is not who files first: The rule is that if your spouse itemizes, you have to itemize. Partially correct... the rule is: If your spouse itemizes, you standard deduction is 0, but you may itemize. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted March 13, 2014 Report Share Posted March 13, 2014 But she is a spouse, is she not? Why would IRS audit her? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 But she is a spouse, is she not? Why would IRS audit her? If she uses the standard deduction and her husband itemizes, her standard deduction becomes 0. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 13, 2014 Author Report Share Posted March 13, 2014 Agreed Pacun...I mulled this over last year when I considered trying to get her done first. I came to the conclusion that regardless of when she filed, if she filed claiming the normal standard deduction for MFS and got her refund, IRS "could" at some point come back and say "Hey, your spouse itemized, so your deduction should have been zero...give us our refund back...plus some more for interest. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted March 13, 2014 Report Share Posted March 13, 2014 I guess I don't understand this. Both are spouses. Why is the determining factor the one who chooses to itemize even if not the first to file? I admit I've done no research on this but what if they were physically separated and had no contact? Does that still hold? Why isn't the second to file 'audited' with a nasty gram and told to take standard deduction as did the spouse first to file? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 I guess I don't understand this. Both are spouses. Why is the determining factor the one who chooses to itemize even if not the first to file? I admit I've done no research on this but what if they were physically separated and had no contact? Does that still hold? Why isn't the second to file 'audited' with a nasty gram and told to take standard deduction as did the spouse first to file? Simply because the rules is something like this: If you are filing MFS and your spouse itemizes, your standard deduction is 0 but you may itemize. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 13, 2014 Author Report Share Posted March 13, 2014 Client actually called IRS last year and talked to a live person. For whatever its worth, they told her the same thing.....If he itemized...regardless of who filed first, her standard deduction would be zero and her only option would be to itemize using whatever few itemized deductions she might have. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted March 13, 2014 Report Share Posted March 13, 2014 Second marriage? Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 13, 2014 Author Report Share Posted March 13, 2014 yes...for both of them Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted March 13, 2014 Report Share Posted March 13, 2014 they live in the home together - why wouldn't she get half or part of the mortgage interest, property taxes? is the home in her name as well? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 13, 2014 Report Share Posted March 13, 2014 they live in the home together - why wouldn't she get half or part of the mortgage interest, property taxes? is the home in her name as well? I think you are better off "letting this one go". You must own the property and PAY the mortgage in order to deduct it. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 13, 2014 Report Share Posted March 13, 2014 In JB's original post he said that the home is in the husband's name, that husband pays all the bills, keeps finances a secret, and sometimes gives his wife a small allowance. She has no deduction for the interest or property taxes. Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted March 13, 2014 Author Report Share Posted March 13, 2014 because she does not know what they are...that type of financial information is his secret....besides...her name is not on the mortgage Quote Link to comment Share on other sites More sharing options...
joanmcq Posted March 13, 2014 Report Share Posted March 13, 2014 Why do you call him a 'dominate'? Quote Link to comment Share on other sites More sharing options...
SFA Posted March 13, 2014 Report Share Posted March 13, 2014 I remember her sad story from last year's tax season. Think of them as roommates. He pays all the bills, she lives there rent free, except for the amount she pays in annual taxes because of this arrangement. Maybe she has some other "responsibilities." Who knows. Really, who cares. She has made her choice. She may enjoy the attention and time that you and others invest in commiserating with her about her miserable husband. Move on. My guess is, she'll be back next year, with the same sad story. 1 Quote Link to comment Share on other sites More sharing options...
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