Does california pre-nup affect fed. taxes?

Mar 16, 2008 11 Replies

Hi all:



I am going to be getting married later this year. We both live and work in California. My spouse makes considerably less money than I do. I understand that the IRS will insist that 50% of our joint income be claimed on each of our returns if we choose to file separately. While I'm not sure that we will be filing separately, I'd like to maintain all our possible options. Does a pre-nuptual agreement allow our incomes to be treated separately for income tax purposes (both federal and state?)



Thanks!


A prenuptial agreement may contain a clause that specifies how income of each is to be considered (community or separate). Note that these agreements should be prepared by attorneys with expertise in family law. Also note that the nine states with CP laws differ when it comes to the definition of community income. Another reason to use an attorney.

Also, the lower-earning spouse should not sign such an agreement solely for tax purposes, nor for any purpose without having his or her own, separate legal advice.

Katie in San Diego

While you will get some good answers on taxation here, a pre-nup is a legal contract and, thus, should be discuss with a California Tax attorney.

You are one more reason I should finish writing my book "Living in Sin for Fun and Profit".

Dick

Here in Canada, whether you like it or not, after TWELVE months of consecutive shacking up, YOU_ARE_MARRIED, for income tax purposes, whether you want to be or not. It is NOT optional. Many government-paid benefits are tied to FAMILY (adults) total net income. Declaring single to try and get these benefits is fraud and I, as a tax preparer, refuse to a party to such schemes.

"sharx35" wrote

So if you're married.....after 12 months of no sex....you're single again?

Some of my redneck buddies would say: Woo Hoo !!!!

I'd guess no. As the courts in the common-law states say, while you can get a common law marriage, you can't get a common law divorce.

Stu

One lived in the basement. One on the main floor. Canada Revenue said that because the basement didn't have separate meters to measure the water, power or gas, then the basement didn't constitute a separate residence and therefore, even in the presence of a FORMAL separation agreement, prepared by attorneys, Canada Revenue insisted that they were STILL legally married and not separated, for tax purposes.

Let me get this straight. You were married, got divorced but continued to live in the same house. As a result CR wants to tax you as married even though you're not?

You'll have to check Canadian law on that issue. It's possible the courts go along with them on this point, as it's not a completely irrational ruling.

Stu

They weren't divorced....simply "separated" BUT with a formal, signed, legally prepared separation agreement.

========================================= MODERATOR'S COMMENT: Please delete all unnecessary material from the prior post when responding.

The courts did not go along with them on this point. See

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for the ruling against the CRA. But, the case is interesting since the judge laid out the conditions for common-law vs. single.

interesting case. Except for the written separation agreement, sounds like the conditions in many marriages!

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