- 1). Gather all of the required documents. This will include all the W-2's, 1099's, etc. Your spouse's name, even if not working, should be on some of the documents for jointly held accounts or assets. Invariably every year, tax preparers get the question, "Can I claim my spouse as a dependent since they didn't have a job?"
The answer is a firm "No." As a couple filing jointly, you get the exemption amount for a spouse in addition to the higher standard deduction for a married couple. - 2). Determine the preferred filing status. Married couples have the option of filing either jointly or separately. It is a rare instance that filing separate is of an advantage to anyone, especially if the spouse has no income to claim. Doing so reduces the standard deduction for the working spouse and eliminates key deductions that can be claimed, not the least of which is the Earned Income Credit.
- 3). Explore the options based on reason spouse is not working. If your spouse owes back taxes or child support, and for that reason is not working, you may still file jointly and use what is known as the 'Injured Spouse Allocation." This will ensure that the "injured party" is able to collect refunds owed without having it taken by the IRS.
If your spouse is not working because they are retired, any retirement income is included in the return as normal. If your spouse is disabled, there are deductions that can be claimed based on the seriousness of the disability. - 4). File the taxes. You may file electronically or by paper return, whether or not your spouse is working. The IRS cares only about the bottom line taxable income amounts and the amounts you owe in taxes.
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