When Married Couples Need a Tax Attorney

Most married couples file taxes jointly. This is the easiest way for them to ensure they receive the tax breaks and itemized deductions they both qualify for in the current tax year. In situations where couples have substantial assets, shared business interests, or other complex financial issues, they may need to consult a tax attorney to ensure they do everything right.

How do couples know when they need professional advice? This guide gives you some helpful pointers on when and why to talk to a tax professional before filing your annual tax returns.

Before the Beginning: Tax Penalties and Tax Cuts

When the IRS first applied the federal tax code to married couples, dual-income couples who filed jointly faced higher tax rates due to their higher incomes. This so-called “marriage tax penalty” added an unwelcome burden to being married.

Congress tried several fixes for this issue, such as widening the tax bracket for single taxpayers filing as “head of household” while keeping the bracket the same for married taxpayers. The Child Tax Credit offered some tax breaks for taxpayers with dependents.

Things did not change substantially for married taxpayers until Congress passed the Tax Cuts and Jobs Act (TCJA) in 2017. This tax reform law equalized most tax rates by making the tax rates for married couples filing jointly the same as those for both spouses filing separately. A marriage penalty may still exist for some high-income couples, particularly those earning over $600,000 combined, and in certain situations involving itemized deductions or credits that phase out at lower income levels for married couples.

Some tax penalties were not affected by the TCJA. For example, certain itemized deductions are only available once. Spouses’ tax liability for their mortgage interest is the same regardless of how they file.

For most spouses, the standard deduction is sufficient to offset any penalties. Those in higher tax brackets might not have as many advantages. Either way, read on for tips that may prove beneficial.

The Pre-Nuptial Financial Checkup

Prenuptial agreements are increasingly common for soon-to-be-weds, regardless of their total combined income. Couples should consult a family law attorney before writing or signing such an agreement. In most states, a prenup is not valid unless each spouse has spoken to their own counsel.

For tax purposes, newlyweds may want to include a tax attorney in their prenup review if either or both of them have any of these issues:

• Substantial pre-existing tax debt, which the other partner does not want to be liable for
• One partner is under audit or at risk of being audited
• One partner has foreign or overseas assets that could cause tax issues

A tax attorney can assist both partners in drafting a prenup to protect the other partner from liability for existing debt and advise them on tax planning strategies to avoid potential penalties and fines.

The Business-Owning Couple

Some couples may run their own businesses or start them during the course of their marriage. Business taxes have their own set of problems that are best addressed through a tax attorney. A tax lawyer can help new business owners choose the appropriate taxable entity for their business, such as an S-Corp or an LLC, to avoid personal liability.

A tax attorney can also draft the partnership and operating agreements to help the couple avoid issues in the event of a later divorce or the death of one partner. Couples should take care to track all monetary transfers from the business to their personal accounts for tax purposes.

Inheritances, Gifts, and Large Investments

A nice inheritance or other windfall can improve the lives of a married couple, but also create headaches in their income tax filing. Let’s examine some of the potential issues.

Understanding Tax Implications of Inheritances

Most inherited assets receive a “stepped-up basis,” meaning their value is adjusted to the fair market value at the time of the original owner’s death. This eliminates capital gains taxes on appreciation that occurred during the deceased’s lifetime. Beneficiaries only face capital gains taxes if they later sell inherited assets for more than this stepped-up value.

However, very large estates may be subject to federal estate taxes before assets are distributed to heirs. In recent years, the federal estate tax exemption has been quite high (over $12 million per person), so most estates don’t owe federal estate tax. Some states also impose their own estate or inheritance taxes with lower exemption thresholds.

How Inheritances Affect Your Tax Return

The inheritance itself is typically not taxable income. However, certain aspects may affect your taxes:

• Income-producing inheritances (like rental property or dividend-paying stocks) create ongoing taxable income
• Inherited retirement accounts (IRAs, 401(k)s) have required distributions that count as taxable income
• A large inheritance, combined with your regular income, might push you into a higher tax bracket if it generates significant investment income

Other instances may apply. Consider speaking with a tax attorney if you’re uncertain about what an inheritance means for your taxes.

Gift Taxes

Gift taxes differ from inheritance taxes. The gift-giver, not the recipient, is responsible for any gift tax. However, most gifts don’t trigger gift tax because of:

• The annual exclusion ($19,000 for 2026)
• The lifetime gift tax exemption (which shares the same high exemption as the estate tax)

Keep the exclusion cap in mind when giving or receiving gifts.

When To Consult a Tax Attorney

A tax attorney can help married couples who:

• Inherit complex assets like businesses, foreign property, or multiple real estate holdings
• Receive inheritances large enough to potentially affect estate planning
• Need to understand required minimum distributions from inherited retirement accounts
• Want to plan charitable giving or other strategies to manage increased income
• Inherit assets in states with separate inheritance or estate taxes

Your tax attorney can explain how to manage these situations, what reporting requirements apply, and how to structure your finances to minimize tax consequences while meeting your financial goals.

Multi-State & International Issues

If you live, work, and own your home in a single state, this section may not apply to your tax filing. For couples who live in one state, work in a different state, and own property in a third state, you have a tax situation that needs help from a tax attorney.

To navigate your way through a tangle of state tax laws, international filing rules, and property tax law, consider speaking with a tax professional. If you try to manage your taxes alone, you may miss many tax advantages or make mistakes on your tax returns that will penalize you or your spouse in the event of an audit.

Resident noncitizens must file on all earned income, including that earned outside the U.S. Some nations have a U.S. tax treaty that provides tax deductions and other benefits. The IRS has specific forms for resident noncitizens and others filing internationally.

If you live in one state and work in another, you must first determine which is your primary residence. Taxes are filed in your home state. Some states have reciprocity agreements, so you can work in one state and only pay taxes in the other state. These details can bog down many married filers, so have your tax attorney do the hard work.

Divorce and Estate Planning

Nobody likes to think about the end of their marriage, but all will either end in divorce or death. Spouses must consider their taxes and what will happen after they are no longer part of a couple. Here are some concerns to consider:

Divorce

The tax year involving a divorce requires careful attention to filing status and income reporting. A tax attorney can help couples navigate these complex situations.

Your filing status depends on your marital status on December 31 of the tax year. This creates a few different possible scenarios:

• If your divorce is finalized before December 31: You must file as single (or head of household if eligible) for the entire tax year, even if you were married for most of the year. For example, if your divorce became final in June 2023, you would file as single for all of 2023.
• If you’re still legally married on December 31: You must file as married, either jointly or separately, for the entire tax year, even if you separated earlier. For instance, if you separated in March 2025 but your divorce wasn’t final until February 2026, you must file as married for 2025.

Even if you’re still legally married, one spouse may qualify to file as head of household if they meet all these requirements:

• The spouse didn’t live in your home for the last six months of the year
• You paid more than half the cost of maintaining your home
• Your home was the main residence of your dependent child for more than half the year

During a divorce, both parties should consult with attorneys who can address:

• Whether to file jointly or separately for the final married tax year
• How property division affects taxes and capital gains
• Which parent claims children as dependents (especially important in the years following divorce)
• Whether you live in a community property state, which has special rules for married filing separately
• Asset division to minimize tax consequences
• Protection from liability for the other spouse’s tax debts through innocent spouse relief

The divorce settlement agreement should include clear provisions about tax filing, dependent claims, and division of any future tax refunds or liabilities.

Estate Planning

Living trusts and other inheritance plans allow people to transfer money and property to family members while minimizing tax consequences. The IRS does not have an inheritance tax, so heirs will not pay taxes when they receive a bequest. However, estates exceeding the federal exemption (over $15 million for 2026) may owe estate taxes before assets are distributed.

Trusts and other estate plans help avoid estate taxes while reserving funds for essential purposes such as medical expenses and other living costs. For married couples, proper estate planning can maximize the use of both spouses’ estate tax exemptions, effectively doubling the amount that can be passed on tax-free. If you’re thinking about establishing a long-term estate plan to protect your assets and your beneficiaries, you should speak with an estate planning attorney.

Married Filing Separately

When should a couple use the “married filing separately” option? This filing status is useful when one spouse has significant debts or assets and wants to keep them separate from the other spouse’s taxes. Some examples of times to file separately include:

• When one spouse has student loan interest or is on an income-based repayment plan, and needs to keep their income as low as possible to keep payments down
• If one spouse has medical expenses and wants to use them as a deduction
• If one spouse has past-due federal debt (such as past-due tax debt or child support) and the other spouse wants to protect this year’s tax refund

In general, married taxpayers have better tax benefits than single filers, so your attorney can explain when you should file separately to protect assets or if there are other ways to file.

State Marriage Taxes

Sixteen states have a “marriage penalty” in their state income tax codes. This penalty has many causes, such as:

• Non-doubled tax brackets, causing the combined incomes to increase the couple’s total taxes
• Dual-earner penalties, pushing a double-income household into a higher bracket
• Different rules for “head of household” filers than for “married filing jointly” filers

One example is Ohio’s requirement that married couples’ state filing must match their federal filing, which can result in tax penalties. A tax attorney can help resolve some of these discrepancies or offer tax tips to avoid many troublesome issues with your tax bill.

Get Legal Help From a Tax Attorney

When married couples sit down to file their federal income taxes, they may need help. Federal and state tax law has penalties for married couples unless they know how to itemize their assets and debts. A local tax lawyer can help you reduce your taxes and keep everything legal. They’ll examine your finances, explain your options, and make sure you’re submitting a return that offers the best tax savings.