If you don’t have children, you may only need to change your marital status on your income tax filing. However, the IRS considers your marital status as of the last day of the tax year. If your divorce has not been finalized by the time you file your income tax, then you may be able to file as a married person and thus continue to receive some of the benefits of marital filing. If you file jointly, you usually are entitled to more deductions, credits, and exemptions; however, a joint filing means that both spouses are responsible for any taxes owed or any penalties that accrue. This means that if your soon-to-be-ex spouse does not pay the appropriate share of the tax burden or there are unpaid taxes from an earlier year, you may have to pay. You might even lose any refund to which you are otherwise entitled.
Once your divorce is finalized, you may encounter other issues. For instance, if you don’t have primary custody of your children, you may not be able to deduct them on your tax returns. If you receive alimony payments from your spouse, those payments may qualify as income on which you will have to pay taxes (and if you pay alimony, you may be able to take a deduction).
There may be further tax consequences if you and your spouse owned a home together. If one of you remains in the home, then you will receive all the tax benefits of home ownership. You may want to consider how to allocate those benefits in any divorce settlement…and, of course, if you sell the home, you will have to decide how to treat any property taxes or interest on your mortgage. Will you split responsibility so that each of you can claim a deduction? Or will these liabilities be offset in some way?
It may seem overwhelming to consider the ways in which divorce can affect your tax burden, but being aware of the issues and planning ahead can help you to avoid unpleasant surprises and lay the groundwork for a cooperative relationship with your former spouse.
Kathleen Davies is a Staff Writer for GetLegal.com. She is a graduate of the University of Michigan Law School and has practiced law and taught legal writing and advocacy.