The IRS Deductions Blog

Posts Tagged ‘home office deduction’

Question: my hubbie and i have filed married joint 3yrs but not legally married, can we file individually now?

For 2007 I worked as an independent contractor and paid no fed, med, ss taxes, and only made about 10k as a part timer. My hubbie did pay taxes. when we went to file the guy really scared us telling me i was in trouble and that we would end up owing alot even with the eic and claiming our 3 yr old. so my husband (not legally married) filed head of household alone, im yet to file my taxes, ive realized that i only have to pay about 400-700 but im concerned about what filing status to use since we do live together, he claimed my son and i would just be claiming home office deductions and so forth. should i do single and file with my mothers address even though my 1099 misc and one w2 would not have the same address. Or could file single with the same address as my hubbie since that is were i live , will that trigger an audit will we get in trouble for filling individually after filing married since we are not legally married, texas does recognize common legal marriage, thnks
a million

Answer: Whoa, what a mess. For federal tax purposes, a marriage means only a legal union between a man and a woman as husband and wife. Further,a person does not meet this test if at any time during the year the relationship between you and that person violates local law.
Has your State ruled you as common law married? If so, DON’T file amended as single for the prior 3 income tax years. You will owe a lot on the Federal, and, if your state has income tax, you may owe a lot on the state, also. If you were married in a foreign country, and OK via the INS, file as married. If your State says you are common law married, make sure your husband amends that head of household 2007 return. Click on Married Filing Jointly and Married Filing Separately in your software. Don’t know how much your husband made, but there is a shot from what you have said that Married Filing Separately would enable you to have a lower income tax liability, or, only slightly higher.

Texas has no income tax. What address did you put on your 2004-2006 returns with the IRS? If you put Texas, get married. Look in to further. Your attorney may have given you erroneous advice. I’m sure every State has common law marriage. It’ s to protect the children.

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Question: Independent contractor in Michigan – will having EIN change how much my income will be taxed?

I currently work for a couple of companies and get 1099s at the end of the year. I have an offer from another company but they require me to have an EIN. My concern is that I will end up paying more in taxes by working under an EIN than I am now working under my SSN. (My husband is primary wage earner and we have 2 children – we file long form and claim our home for a deduction as well). It looks like my tax office may have permanently shut down so they aren’t available to ask. Thanks in advance!

Answer: Having an EIN should not affect your taxes. If you obtain the EIN but do not create a corporation, or if you create an S corporation, then you will continue to report all the income on Schedule SE and on either Schedule C or Schedule C-EZ. However, if you create a C corporation, then it will be required to file its own return and to pay tax.

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Ahead of the Bell: Budget deficit

The federal budget deficit likely will top $1 trillion through the first nine months of this budget year, a slightly improvement from last year’s record pace.

Tax Deduction Tips & Advice : How to Claim Home Office Deductions