Who Is Responsible if My Husband Owes Back Taxes & Dies?
If a spouse dies owing back taxes, the surviving spouse's responsibility for those taxes will depend on whether the tax return at issue was filed singly or jointly. If the taxes were filed jointly, the surviving spouse may be held liable to pay them, and her spouse's death will not change her tax liability.
Spousal Tax Liability
IRS debt and marriage can be a complicated matter. When a spouse files a tax return as an individual, he alone is liable to pay any tax due. Spouses often file jointly because they receive tax advantages by doing so. But the flip side is that each spouse can then be held liable for the entire amount due based on the joint tax return. This liability doesn't end even if the marriage dissolves; the law will still hold each spouse severally liable. Worse, if the tax payment is late, the individual spouses are also each liable for all interest and penalties on the back taxes.
Because each spouse is held individually liable for taxes based on the joint return, the death of one spouse will not theoretically affect the surviving spouse's liability for back taxes. After the death, the deceased spouse's executor is responsible for filing final tax returns, and the government may attempt to satisfy any back taxes owed out of the deceased's estate. But depending on a state's legal protections for family of the deceased, a good portion of the deceased's estate may go to the surviving spouse anyway. It's likely that the surviving spouse will still be held liable for at least some portion of the back taxes. If, however, a spouse dies owing taxes filed separately, the surviving spouse will not be liable.
Sometimes a spouse is also an heir under the deceased spouse's will. The IRS won't hold heirs of the deceased liable for his back taxes; heirs are never obligated to pay those taxes. However, the deceased's estate itself is still liable for those taxes, which may impact the heirs. For example, Joe leaves a will that gives his wife, Ann, 25 percent of his $1 million estate. After the executor pays off creditors, funeral arrangements and all other estate debts, he must also pay the back taxes before giving anything to Joe's heirs. If Joe and Ann owed $300,000 in taxes, the IRS will go looking for those out of Joe's estate. Thus, the payment of back taxes may dramatically reduce Ann's share of the estate.
Innocent Spouse Exceptions
Many people wonder, "If my husband owes taxes do they come after me?" In some cases, the IRS offers something called "innocent spouse." Sometimes, one spouse has incurred a huge tax debt – by failing to report income, for example – that the other spouse did not consent to or knows nothing about. This "innocent spouse" can apply for innocent spouse relief from the IRS. However, the innocent spouse must be able to prove the error on the joint return was entirely due to her spouse's omission, that she had no idea the tax owed was understated, and that joint liability would be unfair to her.
2018 Taxes and Estate Taxes
Although the changes in tax laws under the Tax Cuts and Jobs Act won't affect any back taxes you owe, it's important to note some of the changes it brings for estate planning. Your spouse can leave beneficiaries up to $11.18 million tax free.
2017 Taxes and Estate Taxes
If you're still filing 2017 taxes, you'll need to ensure recipients claim any amount gifted over $5.49 million, since the lower amount applied in 2017. If you are filing taxes for your deceased spouse, you'll also need to pay close attention to the filing deadlines for estates. Those can vary depending on whether your estate goes by a fiscal year or calendar year, which is often chosen based on the death date of the deceased within the tax year in question.
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Writer Bio
Erika Johansen is a lifelong writer with a Master of Fine Arts from the Iowa Writers' Workshop and editorial experience in scholastic publication. She has written articles for various websites.