Filing Your Taxes During Divorce Proceedings
There are many different options for filing your taxes after a divorce, all of which depend on your specific situation and financial picture. However, things can quickly become confused if you are unlucky enough to have tax day fall during your divorce proceedings. It may be a good idea to consult an experienced family law attorney, to have an outside opinion regarding specific tax issues that may appear during a divorce.
In all but the rarest of situations, couples remain legally married while their divorce proceedings are going on, and as such, still technically may file their taxes jointly. Most of the time, middle-class couples will benefit from filing jointly, given that approximately 45 percent receive a significant tax break. If you and your spouse are still legally married as of December 31, you may file jointly for that tax year.
The one important negative involved in filing jointly as still married spouses is that married couples are jointly and severally liable for each other’s tax debts. This means that even if a couple owes tax due to the misdeeds of one spouse, both spouses may be liable for the entire amount. However, the IRS does offer certain forms of relief if you are able to prove that the error was due to your spouse and that you are now divorced. Either way, it is generally a good idea to have your divorce agreement specifically dispose of any debt or asset gained (in other words, a tax refund) so as not to create potential problems. This kind of situation can pose a problem if your divorce is particularly nasty. For example, if your spouse hides or dissipates assets, but does not adequately inform you, their tax return may wind up being erroneous and you may be stuck with the consequences.
Filing as Single Taxpayers
If you are still legally married, the only way that you can file separate tax returns is to have one spouse file as “head of the household” and the other file as “married filing separately.” For many couples, this results in a higher tax bill, so it is less common, but it is recommended if you suspect any kind of foul play or if your spouse is simply the type to mishandle things. If you decide to file separately and you are able to file as head of household, you are entitled to take the standard deduction, even if your spouse elects to itemize. This can save you significant amounts, especially if your spouse makes errors in calculation.
To be able to file as head of the household, the following criteria must all apply:
- You must be single or separated for at least one half of the tax year;
- You must have a qualifying dependent live with you (in most cases, your children will qualify); and
- You must have paid more than half the cost of maintenance on the home where you and the dependent(s) live.
Seek Help From a Legal Professional
If your taxes come due while in the middle of divorce proceedings, it can be a difficult and time-consuming situation. A skilled legal professional can make a difference between a normal tax bill and an unpleasant surprise. Contact an experienced Geneva divorce attorney to help you determine which assets are yours and how best to work with your spouse to ensure both of you meet your obligations. Call us today at 630-232-9700 to schedule an initial consultation.