Filing Taxes During A Divorce

With the end of the year coming up soon, couples going through a divorce often have to add taxes to the list of things to consider as the divorce process moves along. This presents a fun problem (not really) that many couples going through a divorce don’t consider: Should they file joint or separate tax returns?

The answer depends on a few possible scenarios, and is largely dependent on both spouses to determine for themselves.
 

Are You Still Legally Married?

If you’re in the middle of divorce proceedings, you may file a joint tax return if you are still legally married at the end of the tax year (December 31st) and both spouses agree to the filing.

Remember, until a court has rendered a final judgement ending your marriage, your and your spouse are still legally married in the eyes of the law and the IRS.

If your divorce is finalized before the end of the year, then you need to file as “Single” or “Head of Household”. You cannot file jointly if you are legally divorced before December 31st.
 

Do You Want To File Jointly?

In many cases, filing a joint tax return means a lower overall tax liability for both spouses. This benefit is often enough incentive even for spouses going through a divorce to file jointly, but not always.

The downside of filing jointly is that both spouses are then equally liable for any deficiencies, interest, or penalties.

If your relationship with your spouse is amicable enough to discuss taxes and the various pros and cons of jointly filing, it’s an important conversation to have. If both parties agree to file jointly, then everything proceeds accordingly. If one or both parties do not want to file jointly, then both will most likely need to file as “Married Filing Separately” or “Head of Household”.

If your finances are complicated, it’s a good idea to consult with a tax attorney before making any final decisions about your filing status.
 

What If My Spouse Changes Their Mind?

Unfortunately, it is not uncommon for the benefits of a joint tax return filing to be used as a bargaining chip during a divorce. One spouse may agree to jointly file, or to “reconsider” and demand certain concessions in exchange.

This happens because in most cases both spouses must agree to file a joint return. A court will not order unwilling spouses to file a joint return. In rare circumstances, the IRS will accept a joint return signed by only one spouse. If you want to ask the IRS to do this, consult a tax attorney.