Big Question: Am I Responsible for My Spouse When It Comes to Taxes?
I am often asked about tax filings and filing status when people are in divorce.
First, the big item is filing status.
The typically best status (financially) is married filing jointly. This is possible as long as you are still married on December 31 of that tax year. The other option, if still married, is filing separate. Where this is typically the least beneficial way to file, sometimes it is necessary if your soon to be ex-spouse lies on their tax return because guess what…if you sign that tax return, you are liable to any and all lies your spouse commits on that tax form. Granted there is a chance to claim innocent spouse status but if you are able to avoid the headache of the whole situation, why not? At the end of the day, make sure you do a side-by-side review of the options so that you are aware of the outcomes. A Certified Divorce Financial Analyst, or a tax specialist that understands divorce can help you with this.
After divorce, what about claiming children in your return and how is that handled?
The person claiming the children on their return is eligible to file as Head of Household (HOH). That is the most advantageous method of filing, short of married filing joint. To obtain this status the parent must have the child with them 51% of the time during the year. If you have 49% custody, then you are not eligible.
The facts of each case are different and you should look at the facts of your case as this applies to you. You may find that one person benefits financially and is able to pay more support then the other person. In that case what makes sense for you? Does it make sense to share the status (more than one child) and both parties claim HOH? Again this is an issue subject to negotiation and open to the facts as they apply to each case. Again, a Certified Divorce Financial Analyst, or a tax specialist that understands divorce can help you with this.
Again, this is not complete, but it gives you an idea of some issues you may need to be aware of as it applies to divorce and post-divorce planning.