Claiming spouse as dependent for only part of the year.

Submitted by mudra311 t3_z73x3v in personalfinance

Hey all. I just have a quick tax question. My spouse has been out of work since August. We filed for a domestic partnership so I could get them on my insurance (dental and medical). I have not updated my W2 to claim them despite this. Therefore, the insurance expenses are post tax. I have been covering our rent and other expenses during this time as well. We were recently married in October.

They just started a service job at a local restaurant in the past couple of weeks.

Basically my question here is: can I claim them as a dependent for part of the year? If so, is it even worth it? Will I receive a tax break for 2022?

EDIT: I should say this is in Colorado, US.

EDIT 2: As I've seen the error in the question, you cannot claim a spouse as a dependent. I've gotten a lot of good answers and advice on filing jointly. Thanks for the responses all!

EDIT 3: Downvoting someone for ignorance negates the whole reason of asking a question on this subreddit. I have the answers I need.

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mjacob t1_iy4jpys wrote

You can never claim a spouse as a dependent.

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mudra311 OP t1_iy4k7xu wrote

So this would be a married filing jointly piece? It's just complex since they were a domestic partner for a couple of months until we were married.

It sounds like it might be more trouble than it's worth. I figured I would ask if there is a pathway that isn't too complex.

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mjacob t1_iy4kf80 wrote

If you’re married as of Dec 31, you’re married for the entire year for tax purposes.

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mudra311 OP t1_iy4l4vj wrote

Got it that helps.

In this case, we would file separately. Is there anything I can claim on the return for the period that they did not have a job and I was supporting us 100%?

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rnelsonee t1_iy4mbbn wrote

Any particular reason why you want to file separately? You'd give up the advantage of being able to combine your incomes, which is a big benefit if your incomes for the year are relatively unequal.

Note what your company thinks, or what your insurance is set to, or what you put on your W-4 has no bearing on how you file. If you're married on 12/31, you're married for tax purposes. So you can choose to file separately (you each have your own AGI which can be beneficial, but you pay the higher tax rates single people pay) or you can file joint and combine incomes with the tax bracket thresholds set at 2x the Single rates.

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mudra311 OP t1_iy4nr4w wrote

Everyone else is saying to file jointly. So that makes sense.

They did have their own AGI up until August, and then they started working again a couple of weeks ago, albeit at a much lower salary. So I'm assuming that it makes the most sense to file jointly then? It looks like that does bumps us down to 22%.

Appreciate all the responses here. It is obviously my first time filing jointly.

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rnelsonee t1_iy4p1uv wrote

>They did have their own AGI up until August

For whatever it's worth, that's not how it works. Your 2022 taxes are based on the year 2022, which is kind of a theme you're discovering in this post. If you file joint, your incomes are combined (hence the term) and you, collectively, have one AGI for 2022. So if you file joint, your spouse did not have their own AGI in January, or August, or December, and neither did you. Your AGI didn't go up from January through December, either. It's just one fixed number that is set based on your combined 2022 income (minus adjustments).

You likely want to file joint, but say one of you is on an income-based repayment plan for student loans. That's one instance where giving up the tax advantage of combining incomes may outweigh having two separate AGI's (IBR payments are based on AGI).

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mudra311 OP t1_iy4xzbp wrote

The reason I am asking these questions is I've seen variable advice on filing separately, which is why I initially was confused. You provided a good example w/r/t IBR, under which neither of us would fall. The other scenario I could see with filing separately is if our combined income bumps us up into a new tax bracket (which I can't imagine happens often).

I will play around with some calculators, but it appears based on brackets that it would be more advantageous to file jointly.

Again I appreciate the explanation.

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rnelsonee t1_iy51tle wrote

> The other scenario I could see with filing separately is if our combined income bumps us up into a new tax bracket (which I can't imagine happens often).

Just to provide some clarity and save research, that can't possibly happen unless you make $647,850 or more combined.

If you look at tax brackets, you will notice the joint numbers are exactly double that of Single (and Single brackets are the exact same as Married Filing Separate). Same holds true for the standard deduction. So if you make $50,000 taxable income (22% single) and your spouse makes $50,000 (22% again Single) then your joint bracket is $100,000 (22%) and it's impossible to ever go above that. Your marginal rate for joint can be equal to your separate Single brackets (if you make similar incomes) but it cannot ever go above that, at least at <$648k.

The opposite can happen, which is why people with disparate incomes benefit from joint. Say you made $100,000 and your spouse makes $0. You would be in the 24% bracket and your spouse would be in 0% if you did Single. But if you file joint, you're back down in 22% land. So it's like you can "move" your income off your stack onto your spouse's. So you move your 24% portion and some of your 22% portion down to your spouse's 10%, 12%, and 22%.

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mjacob t1_iy4p4ao wrote

You’re almost always better off with a filing status of married filing jointly, but without knowing your entire situation, none of us here can say definitively.

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Werewolfdad t1_iy4ne80 wrote

I think OP is confused and thinks "married filing jointly" and "claiming spouse as a dependent" are the same thing

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mudra311 OP t1_iy4y2u4 wrote

Not any more. That's been clarified.

You can claim a domestic partner as a dependent (which my SO was for a short time) but not a spouse.

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Werewolfdad t1_iy4jva8 wrote

A spouse is never a dependent.

>We filed for a domestic partnership so I could get them on my insurance (dental and medical).

A domestic partnership is for someone who is not your spouse.

Are you actually married or not? Because if you're actually married, your spouse wouldn't be your domestic partner

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mudra311 OP t1_iy4kuor wrote

As I said in the post, we filed for domestic partnership in August and were actually married in October. So there's a mix. In terms of my company, we are still considered domestic partners so they have insurance.

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Werewolfdad t1_iy4l24l wrote

> So there's a mix.

There isn't. You're married.

>In terms of my company, we are still considered domestic partners so they have insurance.

Notify your company that you're married so you stop paying imputed income taxes.

You'll file jointly

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shadracko t1_iy4kedu wrote

>We were recently married in October.

https://www.irs.gov/pub/irs-news/at-04-75.pdf

>Your marital status on December 31 determines whether you are considered married for that year. Married persons may file their federal income tax return either jointly or separately in any given year.

You cannot file as single, so "dependent" doesn't apply here.

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Mysunsai t1_iy4k8yw wrote

Are they your spouse, or are they a domestic partner? Those are not the same thing.

Otherwise, you can claim a qualifying relative as a dependent (“relative” is defined very loosely, and would most likely apply here if they are a domestic partner) if they lived with you for more than half the year, you provided more than half their upkeep, and they earned less than $4200 in the year.

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mudra311 OP t1_iy4ko6y wrote

We were technically married in October. In the eyes of my company, we are still domestic partners.

Sounds like we are over that threshold since they had a salaried job up until August.

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Werewolfdad t1_iy4kxnf wrote

The qualifying relative rules aren’t allocable if you’re married

You just file jointly.

Notify your company that you’re now married

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vynm2 t1_iy6qdz3 wrote

>and they earned less than $4200 in the year.

It's not relevant to u/mudra311 since they were married at the end of the year, but the $4200 income limit doesn't have to be *earned* income and the limit is indexed each year. For 2021 it was $4300; for 2022 it's $4400.

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