You can only file as married if common-law marriage is recognized in your state and your relationship meets that state’s standards. As of May 2011, only nine states recognize such relationships. If you do qualify as a common-law married couple, keep documentation demonstrating your relationship on file with a copy of your return in case of an audit.
Common Law Marriage Basics
As of May 2011, nine states recognize common-law marriages. These states are Alabama, Colorado, Kansas, Rhode Island, South Carolina, Iowa, Montana, Oklahoma and Texas. Also, Georgia, Idaho, Ohio and Oklahoma have grandfathered common-law marriages that took place no later than the early to mid-1990s, and Pennsylvania accepts all common-law marriages prior to January 1, 2005. New Hampshire recognizes common-law marriages for probate purposes only. Utah requires an administrative order to confirm the existence of a common-law marriage. To qualify as married under common law, the two must agree that they are married, live together, and present themselves as husband and wife. How long the two must live together varies depending on the state. Given the tax benefits that arise from marriage, it is important to gather documentation for your taxes to demonstrate that you meet the appropriate standard. A cosigned lease or mortgage, articles of mail showing the shared residence is your main mailing address, and similar documentation may suffice to demonstrate cohabitation. Documentation demonstrating that you and your common-law spouse were presenting yourselves as married could be more difficult, but a shared last name and undertaking common married activities like sharing debt could help demonstrate a common-law relationship.
Filing Taxes While Married
If you do live in a common-law marriage, you are prohibited from filing using a single status, as for tax purposes you are considered married. You have two filing options: filing jointly and separately. There are additional tax credits and deductions if you file jointly, but doing so could also mean that you are charged a higher tax rate since you and your spouse’s incomes are combined. It is a good idea, if you have the time, to complete joint and separate returns to determine which method will provide the lowest overall tax liability. Consider the effect of state income taxes as well.
Recently Married Filers
As common law marriage takes a few years of cohabitation, you do not qualify as married right away. If you and your spouse have recently qualified as married under your state's common-law rules, you need to do a few things to make sure you are tax compliant and not open to significant penalties. First, check your withholding if both you and your spouse work, as the two of you might qualify for a higher tax bracket meaning more will have to be withheld. Also, if one or both of you change your name, notify the Social Security Administration and employer as to any personal information changes.
For complex returns, consult with a certified public accountant or licensed attorney, as they can address your individual tax needs. Keep your tax records for at least seven years, to protect against the possibility of future audits.