Am I getting hosed by the ex on our taxes?

[Snowhunter]

What is the name of your state? New York

My ex and I are separated but not yet divorced and have been filing married-jointly.

We owe money on taxes from past years and make monthly payments on that.

In order to prevent not having enough taken out of our checks each week we agreed to each claim married 0 and in addition we have $200 a month extra taken out of her check (which I then reimburse half to her).

I just found out that she has been claiming 1 but is still having the $200 a month taken out.

We expect to owe a few hundred at least this year and she is expecting me to split that with her right down the middle. NOTE: She earns about 60K and I earn about 45K.

I believe that I'm actually helping pay her taxes and in addition getting hosed some more because I do not believe that I should have to split the overdue balance with her 50/50.

Am I correct in my beliefs? Do I have any legal leg to stand on here?

[TinkerBelleLuvr]

Very simple:

You each make a percentage of the whole. Between you both, you make 105K. Your percentage of the bill is 45/105 (42%). Your STBX is 60/105 (58%). Take your tax bill and multiply by your percentage of what belongs to you. Subtract you contribution to figure out how much of the refund is yours.

Example: The tax bill 10,000 for simplicity sake. You paid in 4500. Your X paid in 6500.
Your portion of the bill would be 4200. Your X's is 5800. You would get back 300 of the refund. Your X would get 700.

[tuffbrk]

I don't undertand - you say you both have $200 extra taken out each pay period but then you reimburse her half of the $200 extra she has taken out of her check? Why? Is the larger portion of the backtaxes yours? And if so - why don't you have $300 taken out of yours and have her take $100 out of hers?

What are you referring to when you say that you don't think you should be responsible for half the overdue balance? Are you saying that you're in a "funds due IRS" position this year?

[Snowhunter]

Sorry for any confusion.

When we were together and on better terms we agreed that it was just easier to have the extra money taken out of one check (hers).

We owe money every year as we have no real deductions other than our daughter. We don't own anything, don't have a mortgage and we both work multiple jobs.

I see it as she is paying less on her taxes during the year, then my $100 helps reduce her tax owed and then I'm splitting whatever is owed at the end of the year (which I believe most of that tax burden is from her higher salary and her paying less taxes during the year).

In my eyes what we each owe should be proportionate to what we earn and I believe that I shouldn't be splitting the $200 with her anymore. Does this make sense?

[LdiJ]

Originally Posted by Snowhunter

Sorry for any confusion.

When we were together and on better terms we agreed that it was just easier to have the extra money taken out of one check (hers).

We owe money every year as we have no real deductions other than our daughter. We don't own anything, don't have a mortgage and we both work multiple jobs.

I see it as she is paying less on her taxes during the year, then my $100 helps reduce her tax owed and then I'm splitting whatever is owed at the end of the year (which I believe most of that tax burden is from her higher salary and her paying less taxes during the year).

In my eyes what we each owe should be proportionate to what we earn and I believe that I shouldn't be splitting the $200 with her anymore. Does this make sense?

I would have to see your actual tax returns, W2s and withholding to tell you for certain what is or isn't proportional.

However, at 60k per year, 26 pay periods per year, the difference between married with zero exemptions and married with 1 exemption is only 20.00 per pay period.

[Snowhunter]

I have no desire to get away with anything, I just want to make sure I pay my share and not be taken advantage of. She is living comfortably while I struggle and I don't need to be paying out more than I should. Ours is the simplest of returns because we have nothing and owe nothing other than our back tax debts. I would think that if I'm splitting the amount due 50/50 when our salaries are not then I'm probably getting screwed. I realize without full details it is hard to evaluate but I need to look for.

She believes that whatever out tax debt is that it should be split 50/50 because even though she makes more her bills are higher. I say that's BS. Is there some sort of law that I can reference to reinforce my point???

[TinkerBelleLuvr]

There is no 'law' in that regard. what is in your court order in regards to this issue. THAT is what would guide this along. In absence of anything, then the courts do look at the equitable division of marital assets/debts.

[LdiJ]

Originally Posted by Snowhunter

I have no desire to get away with anything, I just want to make sure I pay my share and not be taken advantage of. She is living comfortably while I struggle and I don't need to be paying out more than I should. Ours is the simplest of returns because we have nothing and owe nothing other than our back tax debts. I would think that if I'm splitting the amount due 50/50 when our salaries are not then I'm probably getting screwed. I realize without full details it is hard to evaluate but I need to look for.

She believes that whatever out tax debt is that it should be split 50/50 because even though she makes more her bills are higher. I say that's BS. Is there some sort of law that I can reference to reinforce my point???

Well....there is also the issue of whose income caused the tax debt in the first place. If, for example, the tax debt was due to self employment on your part, and/or underwithholding on your part during the year(s) the debt accumulated, then she could/would argue that you should bear the brunt of the burden, because you caused the debt.

So, its really not as simple as you are thinking, when it boils down to pure "fairness".

A property settlement is generally a 50/50 thing, irrespective of incomes. Each party gets half of the assets, each party is responsible for half of the debts.

However, when you try to get into the whole "fairness" issue, then you have to do that completely.

So, who caused the tax debt?

[Snowhunter]

The tax debt was caused by us both. We both started working for a caterer on the weekends. They took out almost nothing in taxes. We then compounded the problem by ignoring it and not paying the taxes. Like fools we let this go on for 4-5 yrs. We now have a huge (from our perspective) tax bill with lots of interest and penalties and even though we have been paying faithfully for over 6 yrs we are barely making a dent in it. I realize that we made a stupid mistake and I'm not making any excuses but it really is not right. We have already paid more than we originally owed (probably twice) and yet we can't make any progress with this. I understand being punished but this is nuts. I'd get off easier with many other crimminal acts. Punish us yes but don't destroy our lives.

Okay, sorry, got off track there. So anyway, the tax debt is ours together and I have no problem with the fact that we split our monthly payment to the government, what I do have a problem with is splitting our current tax bills. I do not benifit from her larger income so why should I help pay the taxes on it???

[LdiJ]

Originally Posted by Snowhunter

The tax debt was caused by us both. We both started working for a caterer on the weekends. They took out almost nothing in taxes. We then compounded the problem by ignoring it and not paying the taxes. Like fools we let this go on for 4-5 yrs. We now have a huge (from our perspective) tax bill with lots of interest and penalties and even though we have been paying faithfully for over 6 yrs we are barely making a dent in it. I realize that we made a stupid mistake and I'm not making any excuses but it really is not right. We have already paid more than we originally owed (probably twice) and yet we can't make any progress with this. I understand being punished but this is nuts. I'd get off easier with many other crimminal acts. Punish us yes but don't destroy our lives.

Okay, sorry, got off track there. So anyway, the tax debt is ours together and I have no problem with the fact that we split our monthly payment to the government, what I do have a problem with is splitting our current tax bills. I do not benifit from her larger income so why should I help pay the taxes on it???

If you are not making any real progress paying down the tax debt, then its because your monthly payments are too low. If your monthly payments don't do much more than cover the interest, then of course you aren't going to make much progress on the debt. I am actually surprized that the IRS didn't structure your monthly payments to ensure that it was paid off in 4 years, because that is the norm.

The sooner you finalize a divorce, the sooner the two of you can be responsible for your own taxes.

If you really don't have anything to deduct other than your child (neither one of you own a home, or have education credits or other kinds of deductions or credits), then it would be relatively easy to figure out if you are paying a disportionate amount towards the joint tax bill.

You have 43% of the total income, she has 57%.

Take the total tax figure from your return and deduct the child tax credit and any daycare credits that you receive. 42% of the remainder would be your share of the tax.

So lets break it down based on the numbers that you gave.

105k total income minus the married standard deduction and three personal exemptions is:
84100.00 Tax on 84100.00 is: 13198.00 minus the 1000.00 child tax credit is 12198.00 Your 43% share would be: 5245.00 Hers would be 6953.00

Her withholding, based on married 1 plus 200.00 per pay period would be: 11700.00, minus the 100.00 you are reimbursing her would be 9100.00.

Your withholding, based on married zero would be: 4758.00 plus the 2600.00 that you are reimbursing her: 7358.00

Something is wrong with this picture. Based on the above the two of you should have a refund of about: 4260 rather than owing anything.

Of course, this is based on 26 pay periods and is based on 200.00 every pay period, and is based on the numbers you gave. If anything is different, the figures won't come out the same.

[Snowhunter]

Thanks for your detailed response. Let me clarify a few thing based on what I have at the moment.


She gets paid once a month.



Her actual numbers were as follows:

Her full time job: 57149 tax withheld 7838

Her part time job: 5568 tax withheld 300

A 1099: 2614 nothing withheld

My full time job: 44571 tax withheld 4847

[LdiJ]

Originally Posted by Snowhunter

Thanks for your detailed response. Let me clarify a few thing based on what I have at the moment.


She gets paid once a month.



Her actual numbers were as follows:

Her full time job: 57149 tax withheld 7838

Her part time job: 5568 tax withheld 300

A 1099: 2614 nothing withheld

My full time job: 44571 tax withheld 4847

Based on the above, you have 40.5 % of the income. The tax on the above (leaving out SE tax on on the 2614) would be 14098.00. 40.05 percent of 14098.00 is 5710.00. Your withholding plus 1200.00 is 6047.00.

Therefore you may be paying a little more than your share, depending on what the actual numbers were on your return. I don't know if you have any child care involved, or if she has any expenses to go against the 1099. Your withholding alone definitely does not cover your share, and your withholding alone plus 1/2 of the balance due is unlikely to cover your full share either.

I don't think however, that you are getting "hosed".

[Snowhunter]

Thanks for taking the time to respond. I have really been at a lose as to where to turn as I live day to day with not a cent to my name.

It appears that your response was cut off. I look forward to reading all that you have to say.

Thank you.

[TinkerBelleLuvr]

Ldij, in the case of old taxes that are due, how would they go about splitting it up? Somehow, I don't think that the IRS will allow them to split it up.

In my opinion, I would have you both obtain separate loans, each for half the IRS debt. Therefore, you can each set up the payments in such a manner that it can be affordable. It'll probably be cheaper than what you are currently paying.

[LdiJ]

Originally Posted by Ginny J

Ldij, in the case of old taxes that are due, how would they go about splitting it up? Somehow, I don't think that the IRS will allow them to split it up.

In my opinion, I would have you both obtain separate loans, each for half the IRS debt. Therefore, you can each set up the payments in such a manner that it can be affordable. It'll probably be cheaper than what you are currently paying.

You could be right Ginny, but IRS interest rates are usually at least as low as someone could get from the bank. On top of that, their payments can't be very high, because the debt isn't going down appreciably after 6 years. Either that, or its REALLY alot of tax debt.

OP, what is your annual interest on the IRS debt?