We have all heard that if we file a joint tax return with our spouse, we typically save money on our tax bill as opposed to filing separately. A disadvantage not discussed is that both spouses are now liable for the whole income tax bill. This would include penalties and interest if incurred. In some situations, one spouse earns much more than the other spouse. If something happened, the least wage earner with the joint tax return can still be liable for the full tax bill.
This issue most commonly arises in a divorce or separation situation when there are unpaid taxes from joint filing years.  The IRS can pursue either spouse for the full amount. If you’re the easiest one to find, or if you have liquid assets, you can end up paying the entire bill.
The only relief when this happens is the so-called innocent spouse rule. If you can prove that you had no reason to suspect tax shortfalls and you did not personally benefit from unreported income, or that you signed joint returns only under duress, you may get off the hook. Unfortunately, this is easier said than done. The innocent spouse relief is given sparingly by the IRS courts.
In order to head off trouble, consider the obvious. If your family spends much more money than the income shown on your tax returns, warning lights should go on. If you don’t understand all the tax and financial issues in the joint return, ask questions. In certain circumstances, you may even want to consider hiring your own tax professional to advise you before signing.
Headed towards separating or divorce? It may be best to file separately. You may pay a little more tax, but that’s better than leaving yourself liable for the tax problems of someone who is no longer on your side. Don’t file jointly unless you’re sure that all income has been reported on the return and that the taxes have actually been paid.