Married filling separately (unique situation)

[Lizziejek]

Hello!!

I have a unique situation and I need some advice. 

My husband has a heavy debt history BEFORE we even met.

He owed taxes, car loans, student loans you name it... in several states.

So... they took our refund for his past debts that I had nothing to do with.

Loving wife, we are in this together etc, I did nothing ... two years in a row. Paid off his debts.

This year, past debts went to court and caught up with him, they started garnishing his wages.

I started a 2nd job.

Now, he filled for bankruptcy without consulting a lawyer. 

I have a simple paycheck and 3 children (biological) under 17 with no other parent.

He has 1 child. We don't have any kids together.

Without telling me, he adjusted his W4 in such a way so more tax was taken out so he could get a bigger tax return.

I no longer want to have any shared Financial responsibility with him.

I don't want to dissolve my marriage but I need to protect me and my kids.

What options do I have?

Legal separation? Stay married and file separately?? 

I make about $30K a year.

Please advise on what the best course of action is to protect myself financially.

Thank you in advance for your help!

[Critter-3]

Legal separation?  Yes if your state allows it... of course too late for 2021.

Stay married and file separately??  Always an option.

File jointly and include  an injured spouse form.

[xmasbaby0]

Only you can decide whether you want to stay married.   We cannot weigh in on that one.   You could file separate returns ---- but that would mean losing child related credits that you might want to receive for your children.   Or you can file a joint return but file "injured spouse" to protect the part of the refund that can be attributed to your income.   If you are in a community property state it gets pretty tricky.

If you were legally married at the end of 2021 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 $25,100 (+$1350 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.

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-separ...

INJURED SPOUSE

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