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I used Gary’s services to file my 2012 income tax return. This was my first year having an accountant do my return, as I have always done it myself using TurboTax. However, this year I had cancelled debt from my old primary residence which I was forced to convert to a rental property after relocating out of state.

While it didn’t cost me anything to do the short sale, the income tax consequence from the cancelled debt, roughly $50,000 in my case, was enough to move me from the 15% tax bracket to the 25% tax bracket.  Needless to say, I was concerned about that.

Finances were already tight and my husband and I are expecting our first child this fall. So the possibility of owing income tax was stressing me out. However, Gary was great at relieving my fears.

He is extremely knowledgeable, answered all my questions and was very thorough. I knew I was in good hands. He kept in constant contact with me throughout the process, keeping me updated on the progress of my return and letting me know what paperwork he needed to complete my filing.

In my mind, best case scenario would have been to not owe any taxes. Second best would be to only owe a little. Well, you can imagine my surprise and delight when Gary told me I was actually due a refund of a little over $2,700.00!

To top it all off, I found Gary’s fee for service to be fair, competitive and affordable; especially given the complexity of this type of return. I am so glad I did not try and go it alone this year. I am extremely pleased with Gary’s service and would recommend him highly to anyone, in fact I already have. If you have cancelled debt from a short sale or foreclosure, don’t freak out. Take a deep breath and call or email Gary. I am grateful I did.

Angie Falke of Holiday, FL

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Wilmington NC CPA Firm discusses IRS Tax Form 8379 | Injured Spouse Allocation

Wilmington NC CPA Firm discusses IRS Tax Form 8379 | Injured Spouse Allocation

Gary Bode, CPA: like most IRS issues, Form 8379 has quirks. If you'd like a free initial phone consult, please call us at 399-2705.

IRS Form 8379, Injured Spouse Allocation, can protect part of a married (or divorced) couple’s IRS tax refund from offset.  Offset, in the following example, means the IRS snatches the couple’s entire tax refund and sends it to some other agency (i.e. a student loan lender, when the loan is in default).  But part of that snatched refund could be saved from offset IF

  • Only one spouse actually owes the debt.
  • The injured spouse (the one not in default) “earned” part of the tax refund.
  • The injured spouse files IRS tax Form 8379.

An Example Where Part of a Married Couple’s Tax Refund is Saved using Form 8379

While this Form 8379 example is straight forward, you will want to consult with your own CPA to see how your particular circumstances factor in.

Scenario

Hubby is in default of his student loan for $25,000.  The wife works for a Wilmington NC CPA, and in 2012, receives a Form W-2 showing $4,000 of federal with holding in Box 2.  Hubby works for Wilmington NC Widgets and receives a Form W-2 showing $6,000 in Box 2.  So, they had a total of $10,000 of federal taxes with held in 2011.  Their Form 1040 tax preparation is simple and Turbo Tax has them expecting a $5,000 IRS refund.  But predictably, the IRS sends them a Notice explaining the entire $5,000 refund went to Hubby’s student loan lender.  Ouch!

“A partial IRS refund is better than no refund.”
-Gary Bode, CPA in Wilmington NC

Form 8379 Saves the Day, or part of it anyway

The wife can file Form 8379 and retroactively salvage her fair share of the couple’s tax refund.  Note she could have filed Form 8379 with the original Form 1040 or separately.  Her share of the refund is $2,000 [(4,000/10,000) x $5,000].

We’re a Wilmington NC CPA firm that understands how to use IRS Form 8379, Injured Spouse Allocation. If you’d like a free initial phone consult, call us at (910) 399-2705.  Don’t let distance deter you.  We serve a broad geographical base beyond NC.  Please read some other posts to gauge our expertise and proactive philosophy.

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