When you are looking at the issue of filing, your taxes there are several important things to consider about community property states.  Typically, while they allow joint ownership of all property purchased during the marriage, they also require joint filing of taxes, as well as 50% claim of all income.  This means for example, if your spouse earns $100,000 per year, and you earn only $10,000 per year, you must file taxes stating that you earned $55,000 per year and your spouse must also file taxes claiming the other $55,000.  $55,000 + $55,000 = $110,000 which is the total of both spouses income. 

However, there are certain circumstances, which require the taxpayer to claim the entire income amount.  From our example if either spouse does not notify the other spouse of their income amount, as well as nature of the income they are penalized with claiming the entire 100% of the income.  Additionally, if either spouse acts as if they are only required to claim their portion of the income, in this case the spouse with $10,000 in earnings only claims the $10,000 then they will be penalized with claiming the entire $110,000 amount. 

This is to ensure that spouses claim the proper amounts on their separate tax returns.  If you are filing a joint tax return, then dividing the amounts equally is not as much of an issue since the incomes of both spouses is listed on the appropriate tax paperwork.  As long as the amount adds up correctly, there is no problem. 

However, while the number of community property states is very small the list of states includes Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and finally Wisconsin.  If you live in one of these states as your primary residence then the community income guidelines do apply to you.  However, if you do not live in one of the above-mentioned states then the community income guidelines do not apply to you. 

There are some guidelines that are designed to protect spouses from being punished with a tax penalty if they are not aware of what is going on.  For example, if one spouse hides income from the other spouse, then the spouse who was unaware of the hidden income will not be penalized.  However in order to avoid being penalized you must show proof that you claimed all income that you knew of, without this proof you can still be held responsible for the entire amount. 

As you can imagine community income rules are not always very fair, and typically, a prenuptial agreement will have no impact on the amount of income that you are required to claim when filing taxes.  However, it is best to consult with an accountant who is knowledgeable in community income to determine the exact tax implications that exist for your circumstances.  Because of the implications that result from poor choices in community tax issues, it is best if you are able to work out an agreement with your spouse. 

While this is not always true, it is sometimes possible to work out.  If you are able to work out an agreement, try to make sure that you and your spouse file your taxes as soon as possible.  Also, seek the use of an accountant if necessary to ensure that you are both adequately protected and there are no surprises or penalties because you have made a mistake in computing the correct figures for your taxes. Also, insist upon a guarantee that will protect you and provide free tax advice and assistance in the event of an audit.