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theomorris33

Question

My wife owes student loans will they take my refund

Forum|Forum|6 years ago
June 7, 2019
3 replies
0 views

how do I make sure that I get my refund if I claim my wife

TurboTax Deluxe Online

DanielV01

Employee

It depends. The IRS can take all of the refund to satisfy the debt, but it is possible to get your portion of the refund. I recommend the following:

First, you can call the following phone number to see if the refund will be taken (offset) to pay the debt: 800-304-3107 (it’s an automated system that asks you to input answers to several ID questions, then says if there is a debt the IRS can use the refund to pay). If the answer is no, you will have nothing to worry about. File Married Filing Joint as normal.
If the answer is yes, and you wish to get a portion of your refund, file Form 8379, entitled Injured Spouse Allocation. See the following link for more details: https://www.irs.gov/uac/form-8379-injured-spouse-allocation

You will still file Married Filing Joint to maximize your deductions and credits. Although the idea of the form is that you get the portion of the refund based on your income and credits, only the IRS can determine what that amount (if any) will be. A return with this form must be mailed in.

However, if you don't have children, have very similar income and will not claim other credits, you may decide to file Married Filing Separately. The IRS will not take your refund if you file a separate return, and if you have this set of circumstances, you'd get about the same back filing joint or separately. But if you have children or other credits, the first way is better.

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kcruz

Last year my husband and I filed jointly and our entire tax refund was taken to pay off his school loan debt. This year my husband is a stay at home dad and has made zero income so I will be filing taxes on my own. Can the IRS still take my tax refund even though I am filing on my own and he didn't make any income?

JamesG1

The IRS can take your refund if you file married filing jointly. Did you receive a notice that the IRS still has an offset against your spouse?

You can contact Department of Treasury’s Financial Management Service at 1-800-304-3107 to see whether there is an offset against your husband.

If you file married filing jointly, you can explore the Injured Spouse option. Form 8379 lets the injured spouse get back your portion of a jointly-filed refund if it is seized or offset to pay your spouse’s debt. See here.

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Darkceas

So... i am basically in the same boat, but a little different.

I make around 120k a year and my wife does not have a job and is a stay at home wife.

She has 60k in student loan debt, and i have none.

If we file jointly obviously i would recieve a tremendous refund back due to the fact i have my w2s as single 0s. But would hate to have all the extra "savings"money go to uncle sam.

My question is.... what is stopling me from changing my w2 to married 9, and offsetting the calculated refund to end up being 0, thus indirectly blocking the garnishment?

SweetieJean

Employee

Well, the IRS could still attach your wages, bank account, etc. The debt isn't going to go away, so why not see if you can negotiate the interest rate down? And, if you are thinking about filing Married Separately, there are special issues if you are in a Community Property State.

Hal_Al

Employee

Q. My question is.... what is stopping me from changing my W-4, at work, to reduce my refund to around 0, thus indirectly blocking the garnishment?

A. Nothing. You're allowed to do that.

Waterman_S

Will I still be effected if my wife had the student debt before we got married? I live in Oregon.

xmasbaby0

Employee

@Waterman_S

If you file a joint return, and your spouse owes outstanding debts for student loans, back taxes, child support, etc. your joint refund can be seized. You can file as an "injured spouse" to protect part of the refund.

INJURED SPOUSE

https://ttlc.intuit.com/questions/1910698-how-do-i-file-form-8379-injured-spouse-allocation

Another way to avoid having "your" part of the refund seized for your spouse's debt is to file married filing separately, but that comes with its own set of disadvantages:

If you were legally married at the end of 2023 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $27,700 (+$1500 for each spouse 65 or older) You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return.

Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states: AZ, CA, ID, LA, NV, NM, TX, WA, WI)

If you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice since with online, you get one return per fee.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separately

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**