Mon, March 09, 2009
Sometimes truth is stranger than fiction. I’ve learned that it's not unheard-of for a professional tax preparer to advise a married individual to file his or her tax return using the single filer status. No! No! Bad tax preparer!
Last fall, one of my colleagues sought advice from a group of planners regarding a client whose CPA had advised him and his wife to file their returns separately using “single” filing status. His inquiry prompted a number of responses from other planners with similar experiences.
Here’s the problem: if you’re married as of the last day of a tax year, you cannot use the “single” filing status in that year. The very first section of the Internal Revenue Code provides that a married person must either file using “married filing jointly” or “married filing separate” status. There’s no option for such a person to file as “single.”
What might motivate someone to try to file using single status in this situation? Most likely, they believe that doing so will allow them to pay lower taxes. If two members of a couple have very different incomes, for example, it’s likely that they would owe lower total taxes if they could each file a single return. If they did this, they’d be committing tax fraud. There are various mistakes that a tax preparer could make, but this one is truly inexcusable. A preparer who gives this kind of advice should definitely be smacked with a rolled-up newspaper.
It’s often a good idea to hire a professional for tax advice, but you should question any advice that runs contrary to common sense. That’s surely the case here: if you’re married, why should you be able to file as “single?” If the advice you get ever seems dodgy, feel free to ask your tax adviser to point you to an IRS document or other legitimate source to justify what you’re being told.