For most couples going through divorce, taxes are the last thing on their mind. But come filing time, they need to consider what their filing status will be. To help you understand you options, read the following answer from our financial expert.
Michelle's Question: My husband wants us to wait until next year to finalize the divorce for tax reasons. He claims it will be beneficial to both of us to maintain married status for this year. What are the benefits of claiming married?
Brette's Answer: The benefits are you generally pay less tax, however I suggest you discuss this with your attorney and tax planner.
Barbara's Question: My husband of fifty years and I separated three years ago. Since we're only separated, could we file our taxes as married filing jointly, which would be a financial advantage?
Timothy's Answer: Your filing status for taxes is determined by your marital status as of December 31 of the current tax year. If your divorce has been finalized by that date, your taxes would be filed either as single or head of household. If you are still married by December 31st, your tax filing status would be either married filing a joint return or married filing a separate return. The individual laws of your state will determine whether you are considered legally separated or divorced at that time.
Even if you were not living together, as long as the divorce has not been finalized by December 31st, you generally have the choice of filing married filing jointly. Please refer to IRS Publication 504 for more information and details, which may be viewed at www.irs.gov. (Update: In some states, filing a legal separation agreement will mean you are considered "unmarried" and can't file your taxes jointly. Ask an accountant or tax preparer how the laws work in your state regarding this issue.)
You are right, more often than not there is a monetary advantage to the filing status married filing jointly. We highly recommend you consult with a tax professional to learn whether there will be a monetary advantage for both parties if you are eligible to claim the married-filing-jointly status.
Karen's Question: Can he force me to jointly file our taxes as a married couple and make me split the refund if he left 11 months ago and rarely pays child support?
Brette's Answer: No one can force you to sign the return. You can file married filing separately.
LaDonna's Question: If my ex-husband and I file our taxes together does that mean that we are legally re-married? Can we file our taxes together year after year if both of us are still single?
Brette's Answer: No. You can only file a joint return if you are married. If you file it and you're not married, you may have a problem with the IRS. It does not magically mean you are married again.