Yes, it’s January which means that accountants all across America are locking into their space capsules for launch into orbit where they will prepare countless returns due on April 15 for TY 2023 and then gently parachute onto some Caribbean island for a staged recovery. Uncle Sam is expecting 120 million returns during the 11 weeks following January 29.

If you were married on December 31 whether by accident (your divorce decree did not get signed) or by design (your accountant recommended marriage) you are eligible to file a joint return with your spouse. It doesn’t matter how long you were married in 2023. December 31 is the only test.

Is the joint return the “right” thing to do? As we wrote long ago in 2021 it appears that the 2017 Tax Reform Act compacted the difference between joint and individual (married separate returns). We showed the math back then and concluded that the tax savings were modest although deductions for health expenses and child care credits can make the calculation challenging.

But, hey, if you can deprive the IRS any taxable income, why not? A fair point to which we offer just a few thoughts.

1. If both you and spouse are W-2 earners so there is no K-1, 1099 or Schedule C income, chances are that you can’t get in too much trouble by trusting the numbers on the W-2 you each receive. But understand, a joint return means you are jointly liable for any sums due to the IRS and for any tax deficiency imposed for underreporting or underpayment.
2. Having said that, realize that your otherwise loving and honest spouse may be one of those people who vastly underpays his/her withholding; the amount deducted and sent to the IRS with each payroll. Other people grossly over withhold thinking of the IRS as their savings bank; ready to send a frothy refund. On a joint return if your overpayments combine with your spouses’ underpayments, you are effectively paying your spouse’s income tax. Realize as well that those people in our world who are self-employed commonly forget or consciously omit making quarterly payments on income. A joint return binds you to pay the taxes your spouse “didn’t” in 2023. The service is entitled to seize your separate bank account to collect taxes due on a joint return because the liability is termed “joint & several.” All for one and one for all.
3. If your spouse owes child support through a state court order and has arrears that are “overdue” (23 Pa.C.S 4302), the IRS is authorized to seize a tax refund to reduce the overdue amount. But, wait. Suppose it was your over withholding that created the refund? In fact, your spouse under withheld meaning that your refund should have been bigger. Doesn’t matter. The refund can be seized and sent to the state where the support is due. We have seen clients who had a spouse who owed them support. They chose to file jointly with that spouse even though they had adequate withholding for a refund and their spouse did not. When they filed jointly to “save taxes” the IRS seized what would have been their refund to pay it to them the same money as support arrears. So, their overpayment was applied to reduce the amount of support their spouse owed them. Ouch!

You may have read that the IRS is developing its own software so that you can elude buying your annual subscription to TurboTax or H&R Block. The problem we are encountering today is that tax preparation is so software driven that accountants and taxpayers are just dumping data into the algorithms and trusting what comes out. We just had an otherwise highly responsive accountant send a return where there was Schedule C (business) income in 2018 through 2021. When the 2022 draft return came through, Schedule C was missing. Reason? “No one sent me 1099s” So the accountant just assumed the business didn’t operate rather than ask what happened or if Forms 1099 were missing.

You need to make certain all your tax data gets to the accountant or uploaded into your software. You should confirm that your spouse is either withholding or paying quarterly tax estimates that approximate what you are paying into the system. And last, you should ask your beloved to log onto his/her state support collection system to see if there are any nasty support arrears that are overdue and subject to seizure.

Here’s info on the IRS software availability.

IRS free tax filing pilot: Taxpayers in 13 states will have access next year to Direct File | CNN Politics

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