You’ve heard the news? Janeane Garofalo the comedienne, actress, and political activist was unwittingly married for the last 20 years to Robert Cohen. It seems they got married in Vegas, but didn’t realize it was a real wedding, they thought it was a joke. Now that Robert was planning to get married for real, he discovered the ‘error.’ I’m not going to judge, mistakes happen. But I wonder what the IRS will think. You see, the tax table for Married Filing Separately isn’t quite the same as the table for single. This is the tax table for 2012:
You can see both the 33% and 35% rate start at far lower level for the Married Filing Separately as compared to the Single rate. She’s put out quite a few movies, and one site puts her net worth at $10M. So, even if she’s a great saver, let’s look at the tax issue on $1M of taxable income. The single would owe $326,761, and the married gal filing on her own, $334,570, a difference of $7,809. I ran the numbers as I was writing this article, and am surprised the difference isn’t much higher. I know congress has reduced the so-called marriage penalty over the years, and consider that a good thing. Not sure if the IRS will even bother going after Janeane, the statute of limitations is 7 years I believe, as this wasn’t fraud, but ignorance, nor was it unclaimed income. On the other hand even 7 years of this error can add up after interest and penalties, and the IRS may be looking for closer to $100K when it’s over. They jail Martha over less than this, but she lied.
I wish you well, Janeane, and offer this as a caution to my readers, if you go to Vegas, bring along a friend who will stay sober and keep you out of trouble.