Filing a Tax Return During Your Divorce Proceedings

When filing income tax returns, many taxpayers seek assistance from legal or tax professionals.  Most married couples file joint returns in order to obtain savings they would not receive had they filed separate returns. Couples involved in divorce proceedings should seek legal advice when it comes to their tax filing status, because they may face extra complications. It is important to have the advice of one experienced with federal law on the subject.

 Discuss your decision to file tax returns jointly or separately with your divorce lawyer.Should you File a Separate or Joint Return?  

It is no doubt easier to file a separate tax return or a head of household return when in the midst of a divorce. You can avoid seeing your spouse should you choose to file separately, allowing you to bypass potential confrontations. You and only you are liable for the taxes owed. Moreover, if you are entitled to a refund, it is yours alone. While these are no doubt solid advantages, it could be worth more in the long run financially to find some common ground and work together with your spouse to file a joint return.

It would be wise to discuss with a family law attorney the pros and cons of filing a separate or joint return. As long as you are still married to your spouse when the calendar year comes to an end (December 31st), the tax code allows you to file a joint return should you choose to do so.  While filing a joint return may save you and your spouse money, there are some disadvantages you should discuss with your attorney. For example, if you file a joint return, both spouses are jointly and severally liable for any taxes owed.  So if your spouse does not contribute a share to take care of the taxes due, you may well be on the hook for the balance.

A good family law attorney can input information into your Marital Settlement Agreement spelling out how you will deal with taxes owed or tax refunds.  Moreover, other big ticket matters like pension or IRA distributions, stock  transfers, and home sales proceeds may impact your filing decision.
The decision to file a joint or separate return is a one time choice.  When your divorce is finalized in a given year, you will no longer have the option to file a joint return. Tax matters can often be very confusing, and this confusion can escalate when you add a divorce proceeding into the mix.  Make certain you select an attorney who is experienced in this area to ensure you take the most appropriate steps to file your return.  Contact our office today to learn how we can assist you.

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