One of the benefits of marriage is being able to file your taxes jointly.
That’s because you get the benefit of certain tax breaks, such as the child and dependent care tax credit, deductions for college tuition expenses and student loan interest, the deduction of net capital losses and various IRA deductions.
But what if you’re in the process of getting divorced? In that case, you need to determine first whether you’re actually eligible to file jointly. Then you need to decide if you should.
When filing taxes for a certain year, you can file jointly as long as the court hasn’t issued the final divorce decree by the end of that year. If you’re eligible on those grounds, you still can’t file jointly unless both spouses agree to do so.
If the court issues your decree after the end of the year, but before you file taxes for that year, you can still file jointly for that year.
If the court issues your decree after the end of the year, but before you file taxes for that year, you can still file jointly for that year, but after that you will need to file separately.
Of course you and your spouse may have different interests at stake. For example, if you are the breadwinner and you make a nice income, you would probably want to file jointly to get any tax deductions for being head of a household, for dependents and for any mortgage interest.
On the other hand, if your spouse makes less money and you file jointly, that might lower his or her tax refund. In a situation like that, you should expect to negotiate whether to file jointly or separately.
If you do decide to file jointly, it’s important that your divorce agreement be specific on how you will be dividing any taxes due or refunds to be received.
What about filing separately? This may be an option if you and your soon-to-be-ex are on such bad terms that you cannot cooperate even for the purposes of filing a tax return. Also, if your spouse has a big tax liability and is unable to cover it, and you file jointly, you may end up being responsible for the tax debt. In that case, separate returns may be better for you.
If you’re getting divorced and trying to figure out how to file, make sure you’re represented by a good family law attorney who is looking out for your best interests and can help you figure out the best way to go.