QUESTION
If we file jointly, will all of our refund continue to go to his prior taxes or am I entitled to some of it as it was past premarital tax?
Asked on Jan 05th, 2016 on Taxation - Michigan
More details to this question:
I purchased a home in 2007 while single. I was married in 2014. My husband hasn't been added to the mortgage or title. I want to refinance in my name alone and use the equity to pay off our separate credit card debt and do some home improvements. My husband has federal taxes owing from previous years before our marriage. He currently has and is paying on an installment agreement to satisfy this debt. I have a couple of questions. Mortgage company said that the state requires that non-purchasing spouse sign the security instruments. He stated if I want to fully add him to Title a Deed, they could draw that up. Obviously, I want to use the equity to pay off debt but do not want it to be taken by the IRS for debt I didn't incur. I'm not sure how to proceed or if I should. He currently owes just under $50,000.00 and all of his tax refunds go towards this as well. His current agreement is $60.00 a month. We are owed a refund for 2014 but as yet haven't filed. Any help or advice would be greatly appreciated.
2 ANSWERS
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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See a tax attorney. Too many issues and a lack of facts make your question unanswerable at the point.
Answered on Jan 27th, 2016 at 9:14 AM
Business Law Attorney serving Mount Pleasant, MI
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Office of Michael Hyde PLLC
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You have several questions presented. Your primary question regarding the tax refund for 2014: I would recommend using a qualified tax preparer and you should file an additional form regarding the injured spouse - Form 8379, Injured Spouse Allocation: The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint over payment is applied to a past-due obligation of the other spouse. Your second question is a real estate question: You can refinance the property in your own name and keep your husband off title (to protect it from IRS tax lien and/or seizure). I would recommend that you have an attorney prepare a post-nuptial agreement where your husband recognizes that property as your pre-marriage asset and abandoning any claim to the property. Then any funds you realize from the refinance can be applied as you choose. Provide the mortgage company with a copy of the post-nup agreement and they should include that in the package to demonstrate why he does not need to sign the documents.
Answered on Jan 27th, 2016 at 9:00 AM