Divorce can be a complicated and difficult process. Adding to the angst, is figuring out taxes when your status is in flux. Clients often ask, because I was married for part of the year, how should I file taxes?
The IRS has five different filing statuses: single, head of household, qualifying widow(er), married filing jointly, and married filing separately. Qualifying widow(er) is beyond the scope of this article, but all other statutes will be discussed. This article will only discuss statues available to married people.
The filing status one can choose depends partly on your marital status on the last day of your tax year.
You are married for the whole year even if you are separated but have not obtained a final divorce by the last day of your tax year.
Both spouses must include all income, deductions, and credits on the same return. Both spouses must sign any joint return. If you file a joint return both spouses may be held responsible for any tax, interest, or penalty. This means that one spouse may be held liable for all the tax due even if all the income was earned by the other spouse. There are some limited exceptions to this rule.
If you and your spouse file separate returns, you should only report your own income, deductions, and credits. If you file a separate return each of you will be responsible for your own tax due. If you itemize deductions, the other spouse may not use standard deductions. You and your spouse will have to coordinate any itemized deductions that were paid jointly. Generally, filing a separate return will result in higher tax.
Normally one must be single to file Head of Household. However, the IRS will allow a married person to file head of household if: you file a separate return, you paid more than half the cost of keeping your home for the tax year, your spouse did not live in the home for the last six months of the tax year, your home is your child(ren)’s main home, and you claim your child(ren) as dependents.
If you are trying to find a divorce attorney that can help answer all of your questions about tax filing status and divorce then you need to call David Johnson. The Law Office of David Johnson in Salem, Oregon can walk you through the process.